Chelsea are reportedly on the verge of re-signing Tiago Mendes on a free transfer after his contract with Atletico Madrid expired at the end of last month.

Spanish newspaper Marca claims that the 33-year-old has agreed to join the Blues in a two-year deal as he is keen on playing under Jose Mourinho. Tiago was one of the Portuguese tactician's earliest signings when he was in charge at Stamford Bridge.

The midfielder made the switch from Benfica in 2004 before moving to Ligue 1 outfit Lyon the following summer. He later joined Serie A side Juventus before moving to Vicente Calderon in January 2010.

Mourinho is thought to be keen on signing another midfielder and is believed to be preparing a massive £60m bid for Paul Pogba by offering the Juventus and France star a lucrative salary package.

The former Inter Milan and Real Madrid boss has already signed Cesc Fabregas from Barcelona but plans are to deploy the former Arsenal star in an advanced role. The 51-year-old is keen on re-signing his compatriot during the summer transfer window in order to add depth to his squad following the departure of Frank Lampard.

The retired Portuguese international played 24 matches for the Spanish capital outfit last season as Diego Simeone's side went on to lift the La Liga title and finished runners-up in the Champions League. The report also suggests that he rejected an extension offer by the Atletico hierarchy to once again sign for the west London club.

Tiago's arrival would be more economical than Pogba's and could also signal the end for John Obi Mikel's Chelsea career.

The Nigerian international's chances of a regular starting role had dwindled further last January following the arrival of Nemanja Matic, and the 27-year-old too could be heading for the exit door at Stamford Bridge.

Meanwhile, Diego Costa's long purported move to Chelsea is finally set to be a reality after the Blues agreed to pay the Brazil-born Spanish striker's buy-out clause said to be worth £32m.

An opinion piece in the AS claims that Tiago played a vital role in convincing Costa to join Chelsea this summer. Mourinho entrusted his compatriot with the job of convincing the striker and as a result earned his contract with the west London club.

Additionally, it states that the Blues boss is ready to award Tiago a role in his coaching staff after the midfielder decides to hang up his boots. Mourinho is also said to be using his compatriot's influence to persuade Filipe Luis to move to Chelsea in the ongoing transfer window.