Afshin Ghotbi will join Japanese Shimizu S-Pulse after the 2011 AFC Asian Cup so Iranian football officials are searching to find a replacement for him.
Denizli, who has been out of management since leaving Besiktas, has already led the Iranian teams Pas and Persepolis.
Swede Sven-Göran Eriksson, Brazilian Zico and Argentine legend Diego Maradona have previously been among the candidates for the post.