The 27-year-old is out of contract at the end of the season, and the report claims Spurs could cash in in January rather than let him leave for nothing next summer.
The France international missed much of last season with a knee injury, and he has not started a Premier League match since the opening day of last season.
He limped off with "muscle tightness in his adductor" during the 3-0 Europa League win over Tromso, and he's made just two Premier League substitute appearances so far this term.
Following the arrival of Vlad Chiriches, Kaboul has found himself as Spurs fourth-choice centre-back - behind the Romanian, Michael Dawson and Jan Vertonghen.
And the report claims AC Milan hope to capitalise on the situation by picking him up on the cheap when the transfer window reopens in January.
Massimiliano Allegri has already agreed a deal to bring out-of-favour Valencia centre-back Adil Rami to the San Siro, and the AC Milan boss is reportedly seeking further reinforcements.