The Daily Star Sunday report that the Italian has impressed the Craven Cottage board with his work at the Baggies after guiding them back into the Premier League.
Former Chelsea star Di Matteo, 40, has built a good reputation in the game for his coaching ability and with little cash to spend Fulham want a tracksuit boss.
West Brom would demand a sizeable fee before letting Di Matteo have talks with Fulham and may even reject any approach.
But Di Matteo may fancy a return to London and could push through a move to a club already firmly established in the Premier League.