The Fulham manager has made it clear to the Anfield hierarchy that he wants his future sorted out before he begins a stint as a pundit in South Africa.
Hodgson, who took Fulham to the Europa League final last season, feared he was being kept in reserve as Liverpool failed to attract a world-renowned coach such as Louis van Gaal, Guus Hiddink or Marcello Lippi.
But with a growing bandwagon of support for Kenny Dalglish, Liverpool have realised they must move quickly to stop themselves being pressurised into appointing the Scot. They plan talks with 62-year-old Hodgson in the next 48 hours.