Stuart Gray took training at Fulham on Monday morning, Sky Sports News understands.
The Cottagers sacked Kit Symons as manager a month ago and Gray's odds to replace him had been cut to as short as 1/8 at 2pm on Monday afternoon, although his price then started to drift.
Gray, 55, was manager at Sheffield Wednesday for 18 months before parting company with the Owls in June.
The former Southampton manager, who is rumoured to be being lined up for a caretaker role at Craven Cottage, has been out of work since leaving Sheffield Wednesday last summer.
Gray who has also managed Northampton Town, has been temporary manager at Aston Villa, Wolves, Burnley and Portsmouth over the years.