"In no way shape or form do I think Benji can't perform at this level for a numerous amounts of years.
"But unfortunately at the moment I haven't got the ability to give him what I think he's worth."
Marshall was dynamic for the Red V last season and finished joint runner-up behind Johnathan Thurston in the Dally M awards.
The Dragons also have young half and Junior Kangaroos and NSW State of Origin under 20s captain Drew Hutchison on their books and would not stand in Marshall's way if he was able to secure a contract at another club.
Marshall was given extra time off over the offseason following ankle surgery and impressed McGregor with his dedication to working at all hours in the altitude room with new Dragons conditioner Tony Ayoub.