Westwood, who is also wanted by Sunderland after leaving Coventry, is a target but Grayson knows he faces stiff competition to land the Irish ace.
He added: "Westwood is obviously a very good goalkeeper. I think he'll have many options though because he's a free agent.
"We are aware what an opportunity it is for him to leave Coventry and go onto better things.
"Whether we can compete with some of those teams, we'll have to wait and see."