The former Manchester City centre back is available as a free agent after his contract with Ligue 1 giants Lyon expired in June.
Denayer rejected the offer of an extension at the Groupama Stadium as he looked to secure a new challenge away from France.
Despite struggling to nail down a regular spot during his time in the Premier League, Denayer amassed 139 appearances in all competitions for Lyon in the last four seasons.
However, fresh reports from Marca claim Los Che are now the frontrunners to sign him, with talks ongoing with the 27-year-old.
Valencia boss Gennaro Gattuso confirmed the club are working on additional signings before the transfer window closes in September following their 1-0 win over newly promoted Girona.