Spurs snapped up the former MK Dons starlet in 2015 and the 21-year-old has been a revelation since arriving at White Hart Lane.
But Wenger has admitted he knows the player very well from the Gunners’ time scouting the player with a view to a move.
“We looked at him,” Wenger admitted. “He’s done very well, he’s a complete player, he’s dangerous and it’s marvellous at his age.
When pushed on how close Arsenal came to signing Alli, Wenger simply responded, “I don’t know.”
The Gunners chief has also claimed his Arsenal future is not a ‘distraction’ ahead of the north London derby as the Gunners fight for a top four finish.
Arsenal squeezed past Leicester midweek thanks to a Robert Huth own goal, but now run in to their local rivals, who have strung together eight successive wins.
Wenger has rejected claims his future will have any baring as they tackle their rivals in the final derby at White Hart Lane.
“Before a game like this it doesn’t cross my mind at all,” Wenger said.
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“There is no distraction. What is important in my life is the next game.
“I don’t know [when it will be announced].”
The Gunners have clawed their way back into the race for a top four finish with back-to-back wins and are now five points behind Manchester City with a game in hand.
Spurs grow from strength to strength though and with the gap 14 points, they would like nothing more than to cement their first Premier League finish above their rivals in 22 years.