Schlupp has been told by the Premier League champions that he is free to leave the club should a suitable offer come in, with the Foxes thought to be holding out for a £12m fee.
Pulis revealed that he has money available after missing out on the signing of Morgan Schneiderlin, who joined Everton in a £24m deal from Manchester United yesterday, but also admitted that other positions are a higher priority than those Schlupp plays in.
"We missed out on Schneiderlin which was disappointing but I understand why. We're trying to get a level of player that will improve us," he told reporters.
"He's gone to a club that have finished in the top seven for the last few years and play in front of 40,000 each week. After Morgan there was still money to go for others as well. We've got people we'd like to bring in, whether we can is another matter.
"It's a small pool we're fishing from. I don't want to get into a situation where there's a lot of players here and you don't know how good they are. We'd love to do Schlupp, but the priority at the moment is one or two other positions."
The Baggies currently sit eighth in the Premier League table ahead of Saturday's trip to face title hopefuls Tottenham Hotspur.