And the report claims Leicester will make their move if Villa fail to gain promotion this season.
Steve Bruce's side are guaranteed a play-off place, but trail second place Cardiff City by four points having played a game more.
And Grealish - who missed a chunk of the campaign through injury - is a man in form, scoring two goals and creating another in his last three appearances.
According to the Daily Mirror, Leicester have been scouting the attacking midfielder.
However, the report adds that Grealish is likely to stay at Aston Villa - on a bumper new contract - if he helps his boyhood club back to the Premier League.
The 22-year-old is said to earn £20,000 a week at Villa Park.
Failure to go up could hit the Villans financially, after two seasons of heavy spending.
The West Midlands outfit are due another two years' worth of parachute payments if they remain in the Championship for that long - albeit of a significantly lower amount to the previous two.
Will Aston Villa join Leicester in next season's Premier League?