The 22-year-old has fallen out of favour at the King Power Stadium and is expected to leave before the transfer window closes on Friday.
As talkSPORT reported last Monday, Thomas is keen to play first-team football.
He's yet to feature for Leicester under Enzo Maresca, despite returning to the club as a winner of the Under-21 European Championship with England in the summer.
Callum Doyle and James Justin appear to be ahead of Thomas in the pecking order for the left-back position at Leicester.
Maddison, who left relegated Leicester to join Tottenham in June, knows Farke well from his time playing under the German at Norwich.
Leicester are likely to favour a permanent deal for Thomas, who has a year left on his current contract.
The England Under-21 international has 85 appearances for the Foxes since making his bow under Brendan Rodgers back in July 2020.
Leeds are desperate to land a left-back before the window closes, given current first-choice Junior Firpo is sidelined through a ligament injury.
Leo Hjelde had been filling in in that position, before summer signing Sam Byram recently took over the role.
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However, Byram suffered an adductor injury in the thrilling 4-3 win at Ipswich over the weekend, forcing him off during the first half.
It means he will be absent from the side to take on Salford in the Carabao Cup second-round on Tuesday evening.
Leeds are now keen to get a ready-made replacement through the door, with Thomas heading the list.
Danish defender Victor Kristiansen is also set to leave the King Power Stadium ahead of Friday's deadline, talkSPORT can reveal.