Essex are in discussions with the spinner and are close to signing a deal, a report on BBC website said.
The report added that he could feature in County Championship Division Two matches. Essex are currently in seventh place in the standings.
Essex missed out on their overseas signings of two players, Peter Siddle (Australia) and Shakib Al Hasan (Bangladesh). Siddle had to return home with a back injury from Australia's tour of West Indies. The Australian paceman was expected to play in the Twenty20 tournament. Shakib was not given a No Objection Certificate.
Harbhajan's inclusion might help them strengthen the spin department which has Tim Phillips (left-arm spinner), Tom Craddock (leg-spinner) and Greg Smith (off-spinner).
Previously, Harbhajan has had stints with Surrey country where he took 57 wickets for them.
The 31-year-old, who has been out of the Indian team since August, 2011, lost his place to another offspinner Ravichandran Ashwin.
Harbhajan has played 98 Tests for India and captured 406 wickets. In 229 ODIs, he has 259 scalps.
Harbhajan's last Test for the country was against England in July-August, 2011. His last ODI for India was against the West Indies in June, 2011.
Loss of form has kept Harbhajan out of the national team. He expected to impress the selectors in the Indian Premier League season 5 in April and May, but could not be at his usual best.
India's next ODI assignment is against Sri Lanka in their conditions. The first of the five-match series starts on July 22.
India will also host New Zealand in August for a Test series. ICC World Twenty20 2012 is scheduled in Sri Lanka from September 18 to October 7. Ashwin has been doing well and he could keep his place and Harbhajan's wait might grow longer.