The England manager's position has been vacant since Fabio Capello's abrupt departure in February.
Hodgson has already managed three national sides: Switzerland, Finland and the United Arab Emirates.
He took Switzerland to the last 16 of the 1994 World Cup and qualification for Euro 1996 - the country had not qualified for a major tournament since the 1960s.
He also gained Finland their highest ever Fifa ranking of 33rd place when he managed the team from 2006 to 2007.
"I'm grateful to Jeremy (Peace, Baggies chairman) and all at West Bromwich Albion for their co-operation in allowing us to approach Roy, who I have since spoken with," said FA chairman David Bernstein.
"Roy is the only manager we have approached and we remain on course to make an appointment within the timescale we set-out soon after Fabio Capello's departure.
"Further conversations will now take place with Roy and my Club England colleagues before any further announcements can be made."
Although there's still a possibility that Hodgson will say no, he has previously described the job as a "tremendous honour".
As his contract is due to expire in June, Hodgson would command barely any compensation, another factor which may have helped the FA reach tonight's decision.
In contrast, Spurs would be expected to ask for a large sum in compensation if the FA approached them about Redknapp.
"The club are currently in negotiations with Roy about a new contract - his current deal ends on June 30 - and remain very keen to bring these talks to a successful conclusion," said West Brom in a statement.
"However, Roy has expressed a desire to explore this opportunity and, accordingly, the club have granted him permission to speak to the FA."
West Brom chairman Peace added: "Roy has done a fantastic job over the past 15 months and the fact the FA want to discuss the England role with him is testament to that.
"Roy is a proud Englishman and we can understand why he wants to speak to the FA about this highly-prestigious managerial position.
"However, we have emphasised to Roy how much we would like him to remain as our head coach and continue his major contribution to our project at the Hawthorns as we look to establish ourselves as a Barclays Premier League club.
"Everyone here has an excellent working relationship with him and he is immensely popular with our supporters."
Career
Hodgson's managerial record has been strong - apart from a dark spell at Liverpool in 2010, marred by a Carling Cup defeat at home to League Two side Northampton and a string of below-par league performances.
His managerial career began in Sweden in 1976, at Halmstad.
Seven Swedish league titles and two Swedish Cups followed at Halmstad and Malmo
over the next 13 years
In a later spell at FC Copenhagen, he won the Danish league and cup double in 2001.
Hodgson also managed with varying degrees of success at Inter Milan, Blackburn,
Viking, Grasshoppers and Udinese.
Head coaching roles at international level with Switzerland, the United Arab Emirates and Finland dovetailed with his club experience to give the 64-year-old a unique perspective on the game.
Hodgson made a return to English football as boss of Fulham in 2007, marking the beginning of a more settled period in his career.
He turned Fulham around in his three years at Craven Cottage, taking the club to the final of the 2010 Europa League, where they lost in extra time to Atletico Madrid.
Despite his record at Liverpool, West Brom chairman Jeremy Peace brought him in on an 18-month deal to save the Baggies from relegation after sacking Roberto Di Matteo midway through last season.
Nineteen points from the final 12 games meant Albion comfortably avoided the drop, and this season they have gone from strength to strength.
But Hodgson has been in no hurry to commit to the club - perhaps suggesting he had another position in mind.
It looks as though he has got what he wanted.
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