The Liverpool boss is a known admirer of the Spain Under-21 international who is being allowed to leave the Bernabeu in the summer.
Ceballos has 24 caps at Under-21 after making his debut as an 18-year-old during a 2 – 0 win over Norway in Cartagena. The midfielder was a member of the Spain side which triumphed at the 2015 European Under-19 Championships held in Greece.
He has represented Spain at 37 times at the junior international levels, scoring six goals.
Not that Liverpool will have it all their way after AS Roma declared their interest in signing the 21-year-old.
The Giallorossi sporting director Monchi knows the player well from his time with Sevilla while Ceballos spent four years with their fierce local rivals Real Betis.
The midfielder is unable to force his way into the Real Madrid starting line-up with most of his 19 appearances this season coming from the bench and will be sacrificed as Los Merengues seek to reclaim the La Liga crown they are surrendering without a whimper.
Liverpool remain on the lookout for Philippe Coutinho’s replacement after the Brazilian left Anfield for Barcelona during the winter transfer window.