The two parties have agreed a deal in principle which would give the 29-year-old until the turn of the year to show manager Martin O'Neill what he can do over an extended period after he joined the club on trial last month.
O'Neill told the Sunderland Echo: "Over the last week or so, I have been in contact with his agent.
"We have in principle agreed something which would suit us all. That would be a contract for a couple of months.
"I still feel James is a bit short of what I would consider real proper fitness.
"And I'm delighted to say, he's not one of those lads who would not want to hang around if he couldn't make progress.
"It's an arrangement that we still need to verify, but it might suit us all. It provides an incentive for James to get into the side over the next couple of months."