Eriksson has coached Benfica twice, leading them to two championships and a domestic cup in the early 1980s.
He then went to Italy but returned to Benfica in 1989, taking the club to the 1990 European Cup final, a game they lost to AC Milan, before winning the Portuguese title in 1991.
Portugal boss Luiz Felipe Scolari was tipped to take over at Eastlands, but it is reported the Brazilian has now distanced himself from the position.
Scolari and former Chelsea boss Jose Mourinho have been linked with the job at City but Thaksin would not be drawn on who might be in charge next season, only saying: "They all - Sven, Scolari, Mourinho - they are great coaches, great managers."
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