According to English publication 'The Daily Mail', the energic frontman impressed Diego Simeone when 'Los Colchoneros' faced 'The Foxes' in the Champions League quarter-finals last season, so much so that he is considering a move for the former Stocksbridge Park Steels man.
Atletico could be on the lookout for a new striker this summer, with Antoine Griezmann heavily linked with a move to La Liga rivals Barcelona.
Since emerging from non-league football, Vardy has established himself as one of the Premier League's top strikers, powering Leicester to a shock title triumph in 2015/16 and has continued in the same vein since, scoring 20 goals in 37 Premier League games this season.
However, Vardy is by no means the only name on Atletico wishlist, with PSG's Edinson Cavani also understood to be under close consideration.
Meanwhile, there are also reservations about Vardy's suitability as a direct replacement for Griezmann, as, at 31, some members of the Atleti hierarchy would prefer a more long-term option, whilst the England international's all-action style of play is a far cry from Griezmann's more technical aprroach.
Nevertheless, the rumours raise the possibility of a sensational career swansong for Vardy.