Medieval commentators David Kimchi and Moses Maimonides accepted the talmudic interpretation of Rabbi Joshua b. Levi. Rabbi Levi explained that God was speaking to creation.
AND GOD SAID: LET US MAKE MAN, ETC. With whom did He take counsel? R. Joshua b. Levi said: He took counsel with the works of heaven and earth, like a king who had two advisers without whose knowledge he did nothing whatsoever.8
R. Joshua of Siknin said in Rabbi Levi’s name: “[W]ith the supreme King of kings, the Holy One, blessed be He, sat the souls of the righteous with whom He took counsel before the creation of the world.”
Some Jewish scholars believe that the mystery of Genesis 1:26 can be solved grammatically. They suggest a “plural of deliberation,” whereby the plural expresses God’s pondering within himself, concentrating his thoughts and meditating over his decision.
Royal “we”:
Rabbinical commentators and linguists recognize that the Hebrew language provides no real basis for such an explanation. Ibn Ezra quotes the Gaon,…who suggests that the plural of Genesis 1:26 is the plural of majesty. He refuted that view in favor of God having consulted the angels.
Gesenius’ Hebrew Grammar (A. E. Cowley, ed., Oxford, 1976) says on the “plural of majesty”: “Jewish grammarians call such plurals…plur. virium or virtutum; later grammarians call them plur. excellentiae, magnitudinis, or plur. maiestaticus. This last name may have been suggested by the we used by kings when speaking of themselves (cf. already 1 Macc.10:19, 11:31); and the plural used by God in Genesis 1:26, and 11:7, Isaiah 6:8 has been incorrectly explained in this way.…It is best explained as a plural of self-deliberation. The use of the plural as a form of respectful address is quite foreign to Hebrew,” p. 398.
Another way to explain Genesis 1:26 is to use the Memra, or “Word” of God. The Targum Neofiti (an early Aramaic paraphrase of the Hebrew text) translates verse 27: "And the Memra of the Lord created the man in his (own) likeness."18
The Targum Onkelos on Deuteronomy 33:27 translates the Hebrew “underneath are the everlasting arms” as “And by His ‘Memra’ was the world created.”