The 26 year old Swedish centre back has played 26 games for Tony Mowbray's side, scoring three goals since his arrival from Dutch side NEC Nijmegen last summer.
Villa are keen to find an immediate replacement for long term injury victim Martin Laursen and signing another reliable Scandinavian could prove beneficial.
Olsson is also attracting interest from Blackburn and Bolton with top flight managers set to pounce on players from the relegated sides.
Assman
Another player being linked with the Claret and Blue is Independiente goalkeeper Fabian Assman.
The 23 year old stopper has also been touted as a possible signing for Chelsea with a £4m price tag being slapped on his head.
But you have to wonder whether Villa are likely to delve into the market for a new No1 as they currently have two top keepers in Brad Friedel and Brad Guzan.
Olsson, however, looks a much more probable signing.