Rodgers quit Vicarage Road to take charge of the Royals in June 2009, but was sacked in December.
"It was unfortunate the way it ended with Watford. My gut feeling at the time was to leave, but there is no doubt, when I look back in hindsight that I shouldn't have," he told the Wales on Sunday.
"I always wanted to go to a club that was going to give me a chance as a manager. Watford did that. They gave me the opportunity. I didn't make a really good start there and the club was a bit broken."
One person poised to stay at Watford for the time being is Marvin Sordell, who has scored four times in as mang games for the Hornets.
He has signed a contract extension to keep him at Vicarage Road for three seasons.
Derby County have signed striker Ryan Noble on loan from the Premier League side Sunderland.
There are some really good players here so I know I'll have to fight for my place, especially if the weekend is anything to go by," he said.
"My main aim is to gain some first-team experience and hopefully score some goals along the way."
Leicester City have extended the loan of goalkeeper Carl Ikeme from Wolverhampton Wanderers for another month.