Grealish has endured a mixed campaign with Villa due to injury but the 22-year-old has still contributed three goals and five assists form 24 outings in the Championship.
Villa are currently challenging for promotion to the Premier League, and Grealish will be considered an important part of the club's bid to remain in the top flight should they earn a return, but it appears that Leicester are monitoring the situation.
According to The Mirror, the East Midlands outfit have identified Grealish as a possible arrival in the summer, depending on how Villa fare in the coming weeks.
The report claims that the Foxes would be prepared to pay in the region of £20m in order to bring in the player, who has made 104 appearances for Villa in all competitions.
Grealish has just over two years remaining on his contract at Villa Park.