McFadden, who made over 100 appearances for Everton from 2003-2008, is a free agent after being released from his contract at Birmingham City.
He had been linked with a return to Everton in the Summer and David Moyes confirmed on Friday that there was some substance to the rumours.
Moyes said: "We have been talking to James and the people behind him for the last few weeks. It could happen but I would say it's probably going against that now."
McFadden, 28, has also been linked to Celtic and Wolverhampton Wanderers.
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