Gary O'Neil has held talks with Wolves over a potential return to the club - less than 12 months after he was sacked by the relegation-threatened Premier League club.
The Molineux side have begun the process of appointing a new head coach following the dismissal of Vitor Pereira on Sunday morning.
BBC Sport reported on Sunday that O'Neil - together with Middlesbrough boss Rob Edwards - was among the contenders to replace Pereira at the Midlands club.
And it is understood O'Neil, 42, is now engaged in discussions with Wolves about a possible return, and that initial discussions have been positive.