Engelaar's agent Eduard Burleson has confirmed the interest from England - but admitted talks between Schalke and FC Twente are at an advanced stage.
"We have spoken with Schalke and terms have been agreed," said Burleson. "But the two clubs have not agreed yet, and so that is where we stand on that."
Burleson admitted that English interest was now getting stronger and that 28-year-old Engelaar could very well be keen on a move to the Premier League.
"I know Everton are interested and that Newcastle could soon make a move," he told Sky Sports.
"He chose to speak to Schalke, firstly because there was not any interest from England at the time and also because of the coach Fred Rutten - who was so good for him at Twente.
"But if does not work, it is now clear could be English options."
Burleson admits Engelaar's performances in Euro 2008 - where he has started every game for the Dutch - have made a number of clubs sit up and take notice.
"Orlando has taken his form from Twente straight into the national side and continued at the same level," he said.
"I think for this reason a number of clubs have suddenly realised what many of us already knew, that he is a very good player."