The Frenchman joined La Liga side Las Palmas last summer and is their top scorer with six goals in 13 appearances.
However, Remy does not figure in the plans of new head coach Paco Jemez, who hinted at disciplinary problems with the 31-year-old earlier this month.
According to French outlet Le10 Sport, Remy is 'very close' to an agreement with the Hornets after negotiations with Spanish sides Levante and Getafe broke down.
The report goes on to claim that, while the deal is not yet finished, there are no potential stumbling blocks and should be 'formalised quickly.'
Remy also played for Queens Park Rangers and Crystal Palace while in England.