The first extracts of "My Life in Football" have been published by The Times, which is serialising the autobiography.
Keegan returned to manage his beloved Newcastle in January 2008 following the dismissal of Sam Allardyce.
Dennis Wise was soon appointed as executive director (football) by owner Mike Ashley, who had bought the club a year earlier. Tony Jiminez was given the role of vice-president (player recruitment).
And Keegan has revealed in the book how a proposed move for Luka Modric was "laughably" blocked by the club's hierarchy.
"At one point I took a call from Luka Modric’s agent to ask if I would be keen on signing the player from Dinamo Zagreb," said Keegan in an extract published by The Times. "Modric had already been speaking to Spurs and his agent was honest enough to explain the move to White Hart Lane was likely to happen.
"His agent flew up from London. I explained what a great club Newcastle was, how the supporters would adore Modric and how we were looking for someone to spark us off. Then Jimenez piped up. 'Can I come in here?' he said. 'I don’t think Luka is good enough for the Premier League. He’s too lightweight. He’s decent, but he’s not good enough.'
"It was an awful moment and, 10 years on, it needs only a cursory glance at Modric’s achievements to realise what a nonsense it was. Even back then, however, it was laughable."
Keegan resigned in September following a turbulent summer which had seen a number of players brought into the club with his approval. He was later awarded £2million after an independent arbitration panel found that he was constructively dismissed by the club.
At the time, he said in a statement: "It's my opinion that a manager must have the right to manage and that clubs should not impose upon any manager any player that he does not want."
Reflecting on his eight-month spell back at United, Keegan said in his book: "I came up against a wall of incompetence, deceit and arrogance, you couldn't make up some of the things that happened at Newcastle under this regime. It was a tragicomedy."
* My Life in Football is published by Macmillian on October 4