McLeish pointed out to Ferguson last season that deciding to play again for his country may impact on the contribution he could make for Blues given the physical demands of the Premier League.
Scotland boss Craig Levein asked Ferguson to reconsider his position but the midfielder has decided to concentrate solely on club matters.
"It's good news for me and Birmingham because of the physical demands of the Premier League on a player," McLeish said.
"Barry was magnificent for us last season and hopefully he will be able to maintain an edge, freshness and sharpness by playing just for Birmingham.
"I am not saying he wouldn't have been able to do that had he played for Scotland but it would certainly have been a test for him. He was immense for us and we hope he can do the same again.''
McLeish also feels Ferguson was in a no-win situation after off-the-field incidents towards the end of the 2008-2009 campaign, which saw him and goalkeeper Allan McGregor axed from the national team after they followed a late-night drinking binge by making v-signs at photographers while on the substitutes' bench.
"Barry has taken everything into account," McLeish said. "He was in a situation where he couldn't win. If he had agreed to go back, no doubt lots of people would have been saying it's a disgrace and things likes that.
"But he's also being criticised in some areas now for not going back. Like I said, it was a no-win situation for him.''