Hornets manager Walter Mazzarri is looking to bring in the Argentine to bolster his squad even further, despite Pereyra being on a long-term contract in Italy.
The Italian boss has brought in four signings so far this summer, Jerome Sinclair, Christian Kabasele, Isaac Success and Juan Camilo Zuniga on loan.
Mazzarri looking to bring in Pereyra
Reports in Italy suggest that the midfielder is one player that Mazzarri is looking to bring in because of the stature and talent that he possesses.
Watford would have to pay the €18 million release clause to secure his services, but Napoli have also been linked with signing the player.
According to Sky Sport Italia, the fee would suit both clubs and the player would be happy with a move away, and then Juve could turn their focus to Napoli forward Gonzalo Higuain once more.
Last season was one to forget for the player, and a move to Vicarage Road would hand him a fresh opportunity to rebuild and progress once more.
Midfielder looks set to move away from Juventus
At the start of the 2015-16 campaign, Pereyra was classed as an important player for The Old Lady, having won the Serie A title and Coppa Italia.
He picked up a runners-up medal in the Champions League and also at the Copa America, but he suffered a series of injuries through the season.
This hampered him as he was only able to make nine starts in all competitions, and with the new formation that Watford will be playing, his style would suit Mazzarri.
The season before he played 35 games in all competitions while he was on loan at Juve from Udinese, but since he signed permanently, it has been a time to forget due to injuries.