Aston Villa's interest became public in the aftermath of Friday's pre-season friendly against Bayern Munich in Hong Kong, which the German champions won 2-1, with Palhinha coming on as a substitute for the Bavarians.
Speaking to Bild after the game, Vidagany confirmed his club were in discussions over the Portugal midfielder, whose path back into Bayern's starting line-up has been blocked since his club-record €51m move from Fulham in 2024.
"We need a midfielder because Amadou Onana will be out for the entire season – and João Palhinha is a very good player who would fit our plans," Vidagany said.
"We are in talks, but there's currently no agreement."
Palhinha spent last season on loan in the Premier League with Tottenham, making 33 league appearances, 23 of them starts, and contributing five goals and two assists, but Spurs opted against making the move permanent, sending him back to Bavaria.
Villa are not alone in monitoring his situation, with Juventus, Milan and Benfica also having been credited with interest, though Vidagany was careful to stress the relationship between the two clubs remained cordial.
"If anything does happen, it will always be on the basis of the big respect we have for FC Bayern," he said. "Our clubs are friendly, and our relationship with Max Eberl, Christoph Freund and all the other people in charge is excellent. That is why I cannot and do not want to comment on any further details."
Vidagany also made the case for why Villa could appeal to the midfielder despite more modest resources than some Premier League rivals.
"I believe Aston Villa would be a great club for the player. In the league, six or seven clubs have a bigger budget than us. Nevertheless, in each of the past four years we have always qualified for international competitions," he said, pointing to Unai Emery's record of securing European football at Villa Park.
Bayern are said to be holding out for around €25m for the 31-year-old, a figure Villa are currently unwilling to meet, with a loan option also ruled out so far.
Palhinha remains under contract at the Allianz Arena until 2028, and is one of three fringe players, alongside Sacha Boey and Bryan Zaragoza, that Bayern have made clear have no long-term future at the club.