The 36-year-old, famed for his dreadlocks and the special glasses he wears for glaucoma, is a free agent since his contract with Dutch outfit Ajax expired in June last year.
Reports in the press are that talks with the midfielder have been ongoing for the last two weeks, and club chairman Milan Mandaric has said: 'We are in conversation with Edgar and his agent.
“If we couldn’t afford him we wouldn’t be talking to him. We should find out in the next couple of days if he’s coming.”
The Foxes returned to the second tier of English football this season after a spell in League One, but they have made a promising start and are in eighth spot following Tuesday night's 2-0 win over Crystal Palace.
Davids has enjoyed a glittering career since first becoming a world-renowned player at Ajax in 1991. He went on to win the European Cup with them in 1995 before moving to AC Milan in 1996 then Juventus a year later.
He has been a Champions League runner-up on three other occasions, while also winning domestic league titles in Holland and Italy.
Davids moved to the Premier League in 2005, joining Tottenham where he spent 18 months before returning to Ajax in January 2007.
Leicester manager Nigel Pearson said: 'When players become available, if they are the right players for us then we investigate it.
'There has been interest but after that I am not in a position to comment further. There is nothing to elaborate on at the moment.
'There has been interest in both directions, but whether it comes to anything is another story.'
Mandaric has also dismissed speculation linking Pearson with a move to Middlesborough, telling Sky Sports that Pearson is 'going nowhere'.
The Foxes returned to the second tier of English football this season after a spell in League One, but they have made a promising start and are in eighth spot following Tuesday night's 2-0 win over Crystal Palace.
Davids has enjoyed a glittering career since first becoming a world-renowned player at Ajax in 1991. He went on to win the European Cup with them in 1995 before moving to AC Milan in 1996 then Juventus a year later.
He has been a Champions League runner-up on three other occasions, while also winning domestic league titles in Holland and Italy.
Davids moved to the Premier League in 2005, joining Tottenham where he spent 18 months before returning to Ajax in January 2007.
Leicester manager Nigel Pearson said: 'When players become available, if they are the right players for us then we investigate it.
'There has been interest but after that I am not in a position to comment further. There is nothing to elaborate on at the moment.
'There has been interest in both directions, but whether it comes to anything is another story.'
Mandaric has also dismissed speculation linking Pearson with a move to Middlesborough, telling Sky Sports that Pearson is 'going nowhere'.
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