Steve Bruce said Wolves gave him a strong indication that he was going to fill the vacant manager's position before a late change of mind.
The 51-year-old was given a second interview, and believed the deal would be formalised the following morning, but missed out to Terry Connor.
"That was the plan," he told BBC Radio 5 live's Pat Murphy.
"At one stage I was close, but it wasn't to be. It's their prerogative."
“Being the manager is lonely. When you get beat it's your responsibility. How do you react?”Steve Bruce on BBC Radio 5 live
After an initial meeting with chief executive Jez Moxey and owner Steve Morgan, Bruce was expecting to seal the deal: "When I left the conversation on Thursday, by all intents and purposes, it was to have another conversation on the Friday.
"I said to my good lady I thought I was back to work. Unfortunately, it didn't happen. I'm disappointed."
Bruce, who has been without a role since he was sacked by Sunderland on 30 November , added that Connor will find the move from assistant to manager a big step.
"When Terry made the first team-talk he would have realised there's nothing like being number one," continued Bruce.
"As a number two, you don't need to make horrible decisions like leaving players out.
"Being the manager is lonely. When you get beat it's your responsibility. How do you react?
"When you're one of the bottom sides, you lose more than you win. When Monday morning comes you have to forget the defeat.
"Wolves are like Wigan, Bolton and QPR - they have to win 10 games. If you don't win 10 games, I don't think you stay up."
Connor has so far overseen Wolves' 2-2 draw at Newcastle Utd and a 5-0 defeat to Fulham at Craven Cottage.