Former Dragons team-mates Luke Charteris and Aled Brew joined the exodus to France during the summer.
But Lydiate, who has been backed to tour Australia with the Lions next summer, is happy to remain at Rodney Parade and reckons a major benefit of staying in Wales is player welfare.
"For the time being I'm happy here. I love playing with Wales and love being at the Dragons," Lydiate told BBC Wales.
"I'm treated really well at the Dragons... whereas, maybe if you went abroad you are just a lump of meat.
"We play hard but they know when you have your bumps and bruises, so if you have to miss a session they don't mind, as long as you put it in on the field.
"[But at a foreign club] it doesn't matter if you have bumps and bruises. They do pay handsomely, but when they pay that well you have got to play.
"I can see why some of the boys have gone out to France, some of the older boys [for] a different life experience. They might not get that chance again.
"But at the minute I'm happy here. I can't thank the Dragons enough, especially in the early days of my career. They gave me a chance to play top-flight rugby and give me the chance to put myself on show to the Welsh selectors.
"Maybe if I had have been at other clubs I might not be playing international rugby. I can't thank them enough."
Lydiate is yet to feature in the Dragons' pre-season fixtures but is back in training following Wales' three-Test tour of Australia.
The chop-tackling flanker returned from Down Under having aggravated the ankle injury that blighted him throughout the season but the problem eased and the 24-year-old did not require surgery.
"I was glad I didn't have to have ankle surgery at the end of the season," added 27-times capped Lydiate.
"I went away to Australia and the injury sort of healed itself. One day I woke up and I didn't have any pain in it, which was brilliant.
"I've come back from Australia, seen the surgeon and he said that if it doesn't hurt there is no point in having an operation.
"Touch wood, it seems fine in pre-season and hopefully it will give me no jip going forward."