The 24-year-old was an unused substitute in the Republic of Ireland's 1-0 win in Holland at the weekend and Tykes boss Paul Hart wants him at Oakwell.
McPhail has a year left on his reported £15k-a-week contract and The Whites are allowing him to go on a free transfer.
Barnsley chairman Peter Ridsdale said: "We are hopeful of getting something sorted out. We've let it be known to the person dealing with transfers at Leeds United, and the player's agent, that we have a genuine interest in Stephen.
"We have entered into discussions regarding Stephen, although they are still at an early stage. But suffice to say we are confident that we may be able to reach an agreement."
McPhail has a year left on his reported £15k-a-week contract and The Whites are allowing him to go on a free transfer.
Barnsley chairman Peter Ridsdale said: "We are hopeful of getting something sorted out. We've let it be known to the person dealing with transfers at Leeds United, and the player's agent, that we have a genuine interest in Stephen.
"We have entered into discussions regarding Stephen, although they are still at an early stage. But suffice to say we are confident that we may be able to reach an agreement."