However, that move may signal the end of Kenny Dalglish's involvement with the club, as the Scot apparently does not see Hodgson as the man to take the Reds forward at a vital point in their history.
Dalglish, who apparently enjoys a friendly relationship with Hodgson, is known to want the Anfield manager's job himself as he does not believe that there are any better qualified candidates around.
Currently employed as a club ambassador, in a role which also allows him input into the club's youth academy, it is felt Daglish may decide to leave the club altogether should Hodgson be appointed.
Hodgson himself is aware of his likely transfer budget at Anfield but is also a reported priority target for England should the Three Lions fail to reach the second round the World Cup and current coach Fabio Capello resign from his post.
With England's make or break game against Slovenia on Wednesday, Hodgson is understood to want to wait and see what transpires with the national side before making a firm commitment to Liverpool.