On an MBR (Master Boot Record) disk you can create up to four primary partitions, or three primary partitions and one extended partition. A logical drive can only be created in free space in an extended partition.
You already have an extended partition on that basic disk; one is all you can have. You can't create a logical drive on unallocated space, only on free space in an extended partition.
On your unallocated space, you can create either another primary partition, or you can extend your extended partition to encompass that unallocated space, and then create a logical drive in the free space in your extended partition.