The midfielder has endured a mixed campaign since leaving Derby County for the Hornets, but the summer signing has impressed in the club's recent games in the Premier League.
Hughes is unlikely to break into Gareth Southgate's plans for the World Cup, but Gracia has said that he would like to see the 23-year-old be given his debut for the Three Lions.
Gracia is quoted by the Watford Observer as saying: "I would definitely like Will to have that opportunity and recognition, I would like all my players to have that in fact, but of course it depends on the national teams' coaches.
"I would like to respect their choices of course, but he's definitely been in good form, yes."
Hughes has contributed two goals and three assists in 14 Premier League appearances this season.