The 28-year-old enjoyed a strong start to the season under Dyche following his club record £7.5million move from Anderlecht in the summer.
However, he has found himself on the bench for the club's last few matches and competition for places is hotting up since Joey Barton returned to the club on a six-month deal.
After starting just two of the club's last seven games, Defour was linked with a move to China after his agent admitted he would be interested.
However, Dyche insists the player is happy at the club despite the competition for places.
He told the Lancashire Telegraph: "I think players' representatives can talk about many things, I don't think it's new his agent is talking about things, all agents do, I've no problem with any of it.
"Steven knows he’s in a good place now, he's enjoying what goes on, it's a challenge, which I told him before he got here, the Premier League is a challenge."