James has been stepping up his recovery from injury in the past week, and he has played for Leicester’s under-21 side twice in the space of four days.
The central midfielder came on as a substitute in the Foxes’ 2-1 win over Sheffield Wednesday, before starting in a 5-1 victory against Nottingham Forest earlier today.
And Ranieri was encouraged by the 24-year-old’s performances, suggesting that his return to the first team is not far off.
James has not made an appearance for Leicester since Ranieri took charge at the King Power Stadium.
The 24-year-old has not played a match since damaging his anterior cruciate ligament in May 2015.
James picked up the injury in Leicester’s match against Southampton last season.
James’ return will increase Ranieri’s options in central midfield, but he faces a fight to win his place in the first team back.
Danny Drinkwater and N’Golo Kante have been in brilliant form so far this season, and they have developed a formidable partnership in the centre of the pitch.