Ranieri, who famously led Leicester to the league title in the 2015-16 season, is expected to sign a contract with Watford later on Monday.
The 69-year-old, who left Serie A club Sampdoria at the end of last season, will replace Xisco Munoz after the Spaniard left Watford a day after their 1-0 defeat at Leeds United.
Italian Ranieri seen here with our Michael YIakoumi could bring a wealth of experience to Watford, having previously managed Atletico Madrid, AS Roma, Juventus and Inter Milan.
Watford are 15th in the Premier League on seven points from seven matches, four points above the relegation zone. They next play second-placed Liverpool at home on Oct. 16 after the international break.
Watford have appointed Claudio Ranieri as their new manager after sacking Xisco Munoz on Sunday.
The Italian, 69, returns to the Premier League which he famously won with Leicester in 2015-16, having left Serie A side Sampdoria in the summer.
It is the 14th managerial change under Watford’s owners, the Pozzo family, since they took over in 2012.
Ranieri is charged with improving their league form as they sit 14th after taking seven points from seven games.
Watford’s first match with their new manager in charge will be at home against Liverpool on Saturday, 16 October.
Ranieri has a wealth of experience with Watford being his 21st club in a 35-year managerial career. In that time he has won eight trophies, including the 1995-96 Coppa Italia with Fiorentina, 2004-05 Super Cup with Valencia and the 2015-16 Premier League title with Leicester.
He is familiar with the English top flight through Chelsea, Leicester and Fulham.
Ranieri is held in high regard at Leicester but was sacked with the Foxes just one point above the relegation zone with 13 matches left in the 2016-17 season.