Cohen also told Vanity Fair that Trump said every country with a black leader is a s***hole and called an Apprentice star a "black f**".
He said the "stupid" comment came after a 2016 rally, when Cohen remarked how white the crowd were.
Recalling an incident in Chicago in the early 2000s, the lawyer says Trump commented on a rough neighbourhood saying "only the blacks could live like this.”
And while discussing why he didn't name Kwame Jackson winner of the Apprentice Cohen added: “He said, ‘There’s no way I can let this black f** win.’”
After Nelson Mandela’s death, he claims Trump commented: "Name one country run by a black person that’s not a s***hole. Name one city."
Cohen says he regrets not quitting after the racist comments, telling the mag: "I should have been a bigger person, and I should have left.”
He had even defended Trump publicly against racism charges.
In an August 2017 tweet, he wrote, “As the son of a holocaust survivor, I have no tolerance for #racism. Just because I support @POTUS @realDonaldTrump doesn’t make me a racist.”
“I truly thought the office would change him,” he said.
The White House did not respond to multiple requests for comment.
In August, Cohen pleaded guilty to charges including campaign finance fraud stemming from hush money payments to porn actress Stormy Daniels and ex-Playboy model Karen McDougal.
Both women claimed Trump had affairs with them, which he denies.
The other charges involve bank fraud and income tax evasion.
As part of his plea agreement, Cohen agreed not to challenge any sentence from 46 to 63 months.
Cohen’s plea follows months of scrutiny from federal investigations and a falling out with the president, whom he previously said he’d “take a bullet” for.
Trump's former aide, ex reality star Omarosa Manigault Newman claimed he used the n-word while off-air during filming of The Apprentice.
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