The 17-year-old starlet has attracted attention from a host of Barclays Premier League clubs after a series of scintillating performances for the Blues this season.
Hughton is not surprised that the talented teenager is on the radar of clubs such as Liverpool and Manchester City, but says that Redmond's future would be better served by staying at Birmingham where he can continue his development with the first-team.
"With a young player like Nathan, there is always speculation," he admitted to skysports.com. "He's a young talent and he would be no different to any young talent at any club.
"His name is going to get mentioned and he is developing well here. In the games he's played, you can see what he is. He is a 17-year-old player that is still developing his game with the good and bad."
In the weekend's goalless FA Cup third round draw with Wolves, Redmond had one of his quieter games for Birmingham, and Hughton thinks that is probably down to the improved calibre of opposition.
"There were periods against Wolves when he was up against good Premier League players when he couldn't get his own way," he added.
"That's what will happen with him. His best place to continue developing is here."