Dunne was part of the Republic's Euro 2012 campaign in which they failed to qualify from their group for the knockout stages in Poland and Ukraine.
Now the Villa centre-back admits he has a hard decision to make in the next few weeks.
When asked if he had considered retiring, Dunne said: "Yes, it has crossed my mind a few times. It's easy after a tournament, the way it has gone, to make a rash decision and say 'that's it'.
"But I just have to think about things. I was basically waiting to get back into training with Villa and then have a think, see how I feel.
"It's a hard decision, because it (playing for Ireland) is something I love doing, and I had a chat with Paul Lambert about it and asked him about it.
"He said it has to be down to me because if I'm not happy with the decision and I regret it, then it's no good. I've already spent four weeks thinking about it and still can't decide."
Lambert, meanwhile, is still looking to strengthen the Villa defence with Ipswich left-back Aaron Cresswell among his potential targets.
But Villa have yet to make a bid for the 22-year-old, who joined Ipswich from Tranmere 12 months ago.
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