Rusnak was on target in Slovakia Under-21s' 5-0 win against Turkey on Tuesday, under the watchful eye of scouts from Bologna and Atalanta.
However, the report claims that Hornets boss Quique Sanchez Flores is also a keen admirer of the Groningen midfielder and wants to bring him back to the Premier League.
Rusnak never played a top-flight game for City and was loaned out to Oldham Athletic, Birmingham City and SC Cambuur before Groningen came calling in January 2015.
The 21-year-old was an instant success at Euroborg, scoring six goals in the second half of last season - two of which helped to secure the Dutch Cup for Erwin van de Looi's side.
However, Rusnak, who can play on either flank as well as in the number 10 role, has struggled to replicate his 2014-15 exploits - mustering two goals and as many assists all season.
Rusnak arrived at the Etihad Stadium from MFK Kosice as a 16-year-old and qualifies as a home-grown player under Premier League regulations.