According to The Athletic, the 26-year-old has just one year left on his current deal and is in talks with the Hornets regarding a new five-year contract.
The terms of the improved deal have not been agreed, and Watford will have to sort out the midfielder’s feature soon.
The player can talk to other clubs from January regarding a free transfer next summer, and the Hornets will have to consider selling him unless an extension is agreed soon.
He was a key player for Watford in the Championship this past season, scoring twice in 30 appearances as they clinched promotion.
Aston Villa could definitely use some depth in central midfield, and Hughes could be a useful addition for a reasonable fee.
However, a move to Villa Park may not be an attractive proposition for Hughes as he is unlikely to be a regular starter.
Villa recently confirmed the club-record capture of Emiliano Buendia from Norwich City and have their sights set on challenging for European qualification next term.
Hughes would be a decent option to have in the squad, but he is unlikely to be keen to give up regular first-team football.