The Baggies are seemingly set to lose manager Tony Mowbray to Celtic after the Scottish giants stumped up the £2million compensation fee Albion inserted into Mowbray's contract at The Hawthorns.
The former Hibernian boss is expected to be unveiled as Gordon Strachan's successor at Parkhead later this week, so Albion chairman Jeremy Peace has already begun the process of finding Mowbray's replacement.
Posh chief Ferguson, who has steered the London Road outfit to back-to-back promotions in the last two seasons, appears to be top of Peace's wishlist, with former Albion midfielder Derek McInnes also a contender.
Fry would want £1million in compensation for Ferguson, and although he does not want to lose his highly-rated manager, he accepts a move to The Hawthorns would be a big step forward in his career path.
The outspoken former Birmingham gaffer said: "I think Darren would see most Championship clubs as a sideways step in his career, but I don't think that would be the case with Albion.
"They are a Premier League club in my opinion and I'm sure any young manager would be interested in them. We have played them four times in the last two seasons and they have a superb squad of players.
"But the situation with Darren is the same as the situation West Brom had with Tony. We don't want to lose him and we would not welcome any approach.
"Jeremy Peace played hardball with Celtic over Tony and we would play hardball with them over Darren.
"But if they agreed to pay the compensation we wanted then we would have to let him speak to them. We know he will leave us one day because he is destined for the top," he told the Express & Star.
Ferguson topped an on-line poll which asked Albion fans who they want in charge if Mowbray moves on, while St Johnstone boss Derek McInnes would also be a popular appointment due to three successful players at the club as a player and captain.