The 23-year-old Colombian international is enjoying a season-long loan spell at Serie A rivals Lecce, with a view to gaining more first-team experience.
Cuadrado has scored three goals in 26 appearances this term, and has impressed in a variety of different roles, most frequently on the right side of defence and midfield.
However, according to Italian newspaper Corriere dello Sport, Arsenal will face competition for Cuadrado's signature with Napoli, Inter Milan and Paris Saint Germain all credited with an interest in his signature.
Udinese will attempt to drive up the transfer fee in a summer bidding war, as they prepare to sell one of their biggest assets to whichever club makes the most lucrative offer.
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