Watson was dropped by Howard Kendall at the weekend and told he could re-unite with Royle as a player and eventually a coach.
Royle is keen to have Watson's experience at the back and the long-serving player also has an interest in management. He was caretaker at Everton last season.
The Everton defender Mitch Ward is facing up to a month out of action with serious ankle ligament damage after being injured in Saturday's game against Newcastle.
Doug Ellis, the Aston Villa chairman, has insisted he is not to blame for Brian Little's departure from the club. Little stepped down last Tuesday and was replaced as manager by John Gregory within 24 hours.
But Ellis is adamant that Little was not forced out of Villa Park by him - a version of events which Little has endorsed. "I've had some stick with people saying it was me that caused it but it certainly wasn't anything to do with me and he [Little] has confirmed that," said Ellis.
"I was surprised when he came in and said he had had enough. I think the straw that broke his camel's back were newspaper articles that morning.
"He put three photocopies on my desk and said: `Look at those'. He'd had enough," Ellis told BBC Radio 5 Live's Sportsweek programme.
Peter Leaver, the chief executive of the Premier League, has called for an overhaul of the international fixture calendar.
Leaver believes Fifa's decision to sanction the Confederations Cup in Saudi Arabia and the Gold Cup in North America ahead of the World Cup finals in France was "a complete nonsense".
He said: "They [Fifa] will have the players from the end of May. They must be available for their national federations, so what on earth is the justification for sanctioning these competitions?
"Clubs must release their players - because it's a Fifa- sanctioned competition - 14 days before the competition starts. It seems to me to be a complete nonsense and the international fixture calendar must be brought under control," he told Sportsweek.Reuse content