He signed a three-month contract at the Stadium of Light in October, after featuring only eight times for Everton last season.
But the 29-year-old has made just three appearances from the bench under Martin O’Neill and he is unlikely to be offered a new one, unless O’Neill considers his squad is too thin to dispense with the Scotland international’s services.
If Sunderland do opt to release McFadden, then there is interest both from the Championship and the SPL for the former Birmingham forward.
McFadden is thought to be on the radar of Nottingham Forest boss Alex McLeish after the pair worked together at international level.
And both Aberdeen and Motherwell, who were interested in signing McFadden before his arrival at Sunderland, are also in the running.