The Australian left-back is set to head to Griffin Park on loan, with reports that he is to sign a new deal at the Foxes before the move.
Peterborough's Callum Elder in action with Luton's Olly Lee
The Australian fullback, who came through the club's academy, is highly thought of at the King Power Stadium, having moved up the divisions in recent loan spells.
ESPN have said the the 21-year-old is expected to complete a new three-year deal with his parent club ahead of a move to North London.
Millwall's Fred Onyedinma and Peterborough United's Callum Elder in action
Elder hasn't appeared for the Leicester first team yet, but has 42 appearances to his name after impressing while out on loan at Mansfield Town and Peterborough United, where he turned out 24 and 18 times respectively.
With his path to the first team currently blocked by Christian Fuchs, Jeffrey Schlupp and Ben Chilwell, Ranieri is said to be eager for the player to experience Championship football, and ESPN suggest that there were several sides in for the Australia Under-20 international.
Jake Bidwell in action with Ipswich's Luke Chambers
It is a decent move by the Bees, who saw first-choice left-back and captain Jake Bidwell move to London rivals Queens Park Rangers earlier in the summer.
Manager Dean Smith will be hopeful of putting together a side that can gatecrash the playoff positions in the Championship this season, and it is likely that Elder will be a major part of that challenge.
Southend's Joe Pigott in action with Mansfield's Callum Elder (L) and Lee Beevers