The Daily Star says former Anfield boss Rafa Benitez is poised to set up a quickfire reunion with the £25m-rated Mascherano by luring him to Inter Milan.
Inter will offer Sulley Muntari as part of the deal.
Liverpool rate Mascherano at around £25m, but they could be persuaded to take Muntari in a player-plus-cash deal.
The Ghana midfielder, who is 26 next month, spent one season at Portsmouth and could cope with the high pressure of the Premier League, which will be important as Hodgson looks to hit the ground running when the new campaign starts.
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