According to The Mirror:
Boss Kenny Dalglish has explored the prospect of taking Granero on loan until the end of the season as he look to add some cover for his depleted strikeforce.
Granero can play wide or as a second striker, and he has been on the Anfield radar for some time.
The 24-year-old, who has played for Spain up to Under-21 level but not for the senior side, has also been linked with Arsenal, but Dalglish is hoping to arrange a short-term loan.
Granero has struggled to make an impact at the Bernabeu this season, making just four appearances under coach Jose Mourinho.
The Spanish giants are hoping to sell him in what remains of the January window but so far there have been no takers, which has encouraged the Reds to believe they can thrash out an agreement.