The 36-year-old retired last summer after finishing a prosperous career with his native Australian A-League side Melbourne Heart and has been working through his coaching qualifications whilst setting up a youth academy Down Under.
Sky sources understand that contact has been made between Hornets officials and Kewell but they are not yet close to any agreement, and an English newspaper has claimed former club Liverpool are also interested in him joining their youth staff.
Kewell is an experienced former Australia international who won 56 caps. He came through the youth ranks at Leeds himself and played over 200 times for the club during their boom in the late 1990s and early 200s in which they qualified for the Champions League.
After 45 Premier League goals for Leeds he moved to Liverpool in 2003 where he made 139 appearances in all competitions and scored 16 goals.
Kewell then moved to Galatasaray on a free transfer before moving back to Australia in 2011.