The Middlesbrough-born midfielder will join on a three-year contract if he passes a medical.
Huddersfield will have the option for a fourth year as part of the deal for Hogg, who has Premier League experience with Aston Villa and was part of the Watford side beaten in last season's Championship play-off final.
Town boss Mark Robins told the club website: "Jonathan's arrival is an important one and we're delighted we've been able to bring him in.
"Jonathan is a northern lad and when we learned he was looking to move nearer home, we acted very quickly to secure his signature. I know Watford were very reluctant to see him leave after he was so key to them last year.
"He is a different kind of midfield player to the ones we have at the club. We have a lot of talented ball players here, but Jonathan has an abundance of energy and can do everything you want from an all-round midfield player."