Atletico are looking for a new centre forward, with Antoine Griezmann set to leave the Wanda Metropolitano in a long-awaited move to Barcelona.
Manager Diego Simeone was impressed by Vardy, who scored 23 goals in 42 games last season, when Atletico faced Leicester City in the 2017 Champions League quarter finals.
Jamie Vardy could be set for an astonishing late career move to Atletico Madrid
Diego Simeone was impressed by Vardy when Atletico faced Leicester in Champions League
However, with Vardy now aged 31, Atletico are looking at other, more long term options as well as at the England international.
There are also concerns about Vardy’s technical skill – while he is a prolific goalscorer, there are doubts over whether he could replace the guile of Griezmann at Atletico.
As a result, Atletico Madrid are considering other options, such as PSG forward Edinson Cavani, who could leave Paris this summer following a season of disagreements with star player Neymar.
Atletico have also not given up on re-signing former player Sergio Aguero from Manchester City, in a similar vein to how they brought Fernando Torres back to Madrid.
Vardy scored 23 goals in 42 games last season and is in England’s squad for the World Cup
However Simeone feels Vardy could work well with Diego Costa in a strike partnership, although they are likely to have to splash out around £20million to prize the forward away from Leicester.
It would complete a remarkable rise for Vardy, who has gone from being released by Sheffield Wednesday aged 16 and playing in non-league for the likes of Stocksbridge Park Steels and Fleetwood Town.
He joined Leicester in 2012 for £1m, and helped them win the Premier League title in 2015-16. Arsenal tried to sign Vardy the following summer, but he decided to remain at the King Power Stadium.
Atletico also have other replacements for Antoine Griezmann in mind, such as Edinson Cavani