St George Illawarra chief executive Peter Doust is expected to meet with Wayne Bennett early next week to discuss the seven-times premiership-winning coach's return to the club next season.
The Dragons insist no offer has yet been tabled for Bennett but he is now at the top of their list to take over the coaching reins after Steve Price's sacking in late May.
Since then, Doust is understood to have spoken to several potential candidates including Kangaroos coach Tim Sheens and Gold Coast assistant Neil Henry.
However, Paul McGregor is the favourite for the job if a deal with Bennett fails to eventuate after he steered the team to four wins in their past five matches and a four-point loss against competition leaders Penrith.
Bennett said after he announced his departure from Newcastle on Thursday that he was interested in the St George Illawarra job but had not yet held discussions with officials from the Dragons - or any other club.
However, he is expected to do so after the Knights match against Cronulla at Redmondis Stadium on Sunday.
Bennett will be in Sydney on Monday for a press conference with Alex McKinnon ahead of next weekend's Rise For Alex round to raise funds for the 22-year-old Newcastle forward who suffered a spinal injury earlier this season.
The Mercury reported on Friday about Bennett making a return to Wollongong next year.
Brisbane, North Queensland and Gold Coast were also linked to Bennett, and his decision to quit the Knights will now force those clubs to evaluate the future of their coaches and consider whether to make a play for the 64-year-old supercoach.
The way Bennett managed his exit from Newcastle followed a similar pattern to the way he departed Brisbane in 2008 and St George Illawarra in 2011.
On both occasions, Bennett announced he was leaving the club he was coaching and said he did not have another job to go to but was open to offers.
He tendered his resignation to the Broncos with a year left on his contract at a board meeting on February 5, 2008, and signed with the Dragons on March 31, 2008.
In between, he is understood to have agreed to a deal with North Queensland and was in negotiations with Canberra.
Bennett did not take as long to resolve his future after announcing he would not be seeking a new contract with the Dragons on March 30, 2011, and signed with the Knights on April 12, 2011.
However, he had already been in advanced negotiations with South Sydney and was strongly linked with a return to Brisbane before he was lured to Newcastle on a lucrative four-year deal by former billionaire Nathan Tinkler.
After he declared that the Knights would be better served by a younger coach who could afford to wait longer for the team to become a premiership contender, Bennett was asked during a radio interview on 4BC whether he was looking to "cherrypick" a club where he could achieve "instant success".
"When I left the Broncos, the one thing I didn't want to do was kind of go backwards in my career because it took so long to build it," he said.
"I realised coming to Newcastle that I was taking a risk and I was prepared to do that because I believed in what Nathan Tinkler was doing.
"I have no regrets about that but the performances this year are just unacceptable."