Houllier has emerged as one of the leading contenders to replace Martin O'Neill who quit as manager three-and-a-half weeks ago.
Houllier has created a favourable impression with Villa owner Randy Lerner after being interviewed by the American multi-millionaire.
But the possibility of Houllier working alongside MacDonald rather being in charge solely in his own right is under strong consideration.
Former Liverpool midfielder MacDonald is widely respected in football circles for his coaching abilities and he has impressed during his five games in charge.
And Houllier may prefer a director-of-football-type role as he would not have to encounter the pressures of being in the dug-out after suffering a heart attack during his reign at Liverpool.
Lerner is likely to make an announcement about O'Neill's successor during the early part of next week ahead of Villa's next clash at Stoke on September 13.
Houllier, who is 63 today, left Anfield six years ago and has been employed as France's technical director since parting company with Lyon in 2007.
He enjoyed considerable initial success with the Reds and led them to a UEFA Cup, FA Cup and League Cup treble in 2001.
Villa believe he has the reputation and CV to keep Villa on an upward curve after three successive top- six finishes in the Premier League.
Before he moved to Liverpool, he also enjoyed title success with Paris St Germain and spent a decade overseeing the development of French football.
Former West Ham boss Alan Curbishley and MacDonald have also been interviewed for the post by Lerner and Villa chief executive Paul Faulkner.
Roberto Donadoni is also intererested in the job.