The Paraguayan forward has a contract with the Lisbon-based club until 2014, but Benfica are keen to secure the long-term future of their star striker.
But that clause was thought to be dependent on Cardozo accepting the contract.
Benfica are expected to improve their offer, and Cardozo is still expected to sign a new deal for the Portuguese giants.
But the rejection opens the door to a move, should Chelsea reignite their interest in the striker.
The Blues were looking at Cardozo following the departure of Didier Drogba, but eventually decided against signing a new striker.
Chelsea boss Roberto Di Matteo has instead placed his faith in Spain international Fernando Torres, who endured a tough time last season, but has started brightly this campaign.
Chelsea sit top of the Premier League table, following their 2-1 victory over Arsenal at the Emirates Stadium last weekend, during which Torres scored.