The 29-year-old has failed to establish himself as a first-team regular at the King Power Stadium, after making his £30 million switch from Sporting Lisbon in the summer of 2016, although it is unclear whether Claude Puel would be willing to sanction his exit.
If Leicester do indeed agree to sell the Algerian, however, they will surely demand a fairly substantial transfer fee, and it is debatable whether Watford could actually afford to bring him to Vicarage Road.
The 29-year-old's future with Watford is uncertain, after the Telegraph reported earlier this year that Leicester were interested in signing the striker, so a swap deal would seemingly be the ideal solution for both parties, with no money actually changing hands.
Deeney's physical approach to the game would be ideally suited to the manner in which the Foxes play, and his attributes make him the perfect strike partner for Jamie Vardy.
Slimani, meanwhile, would offer the Hornets a totally different option through the middle, and he would provide them with a fantastic focal point from which to build their attacks.
With the opening of the January window just around the corner, this will certainly be one to keep a close eye on, with both sides keen on doing business this winter.