The Elland Road outfit are on the hunt for a new boss after Neil Warnock stepped down in the wake of Monday's 2-1 defeat at home to Derby.
McDermott is one of the leading candidates for the post, having been dismissed, harshly in the opinion of many, by Premier League strugglers Reading last month.
McDermott led Reading to the Championship title last season and Leeds may see him as the ideal man to mastermind a promotion campaign in 2013/14.
Warnock says he always intended to step down when the play-offs were out of reach this season and decided that moment had arrived on Monday, the loss to Derby having left Leeds 12th, and closer to the drop zone than the play-off spots.
McDermott is the even-money favourite with Sky Bet to become the next permanent boss at Elland Road.
Less likely candidates to get betting quotes include former Leeds stalwarts Lucas Radebe and Tony Yeboah, who are both 100/1.
Steve Kean, hugely unpopular with the fans during his time in charge of Blackburn, which came to an end earlier this season, is also considered a 100/1 no-hoper.