Steele, 24, has said he would "love to stay" at Oakwell but says he may need to leave to establish his career. The ex-Man Utd keeper played an integral part in the Reds brilliant cup run last season including a stunning performance at Anfield when the Reds beat Liverpool 2-1.
Steele hasn't featured for Barnsley since the Reds 1-0 defeat to Cardiff City in September 2008 and told the Sheffield Star:
"I love Barnsley and the fans, I'd be sad to go. But it looks as though it's going to have to be me who looks for another club because Heinz is starting every week."
"Football's a short career and I want regular football. It's just not been happening for me. I've been working really hard in training, but I haven't been able to get in the side.
He added: "It's horrible when you're not playing. I've knocked on Simon Davey's door and asked why I'm not playing, but he's tried to keep a consistent team."
Meanwhile, young midfielder Simon Heslop has been training with League Two outfit Lincoln City. He has appeared in reserve team games.