Newcastle boss Rafa Benitez is known to have been impressed with Townsend during his previous spell at St. James' Park, but found his hands tied when Crystal Palace activated a £13m release clause following the Magpies' relegation.
Crystal Palace are understood to be open to talks for the 26-year-old, despite the player being a regular under Roy Hodgson last season.
Palace would look to use the funds they collected from the Townsend deal to strengthen their own summer spending.
The player has said previously that he enjoyed his time in the North East too, so would likely cause few problems in agreeing the move.
However, the whole deal hinges quite heavily on whether Ritchie does choose to move to Gary Rowett's Stoke.
It would be a step back down to the Championship for a player who was still a significant and important part of Benitez's squad last season - and who is a firm fan favourite among the Toon Army.
Rowett is proving with his signings this summer at Stoke that he plans to be ambitious, but the allure of already guaranteed Premier League football with Newcastle might be enough to convince the 28-year-old Scottish international to stick around on Tyneside.
Either way, the deal works in Benitez's favour.
Should Ritchie stay, then the Spaniard retains a player he enjoys and trusts, and should he go then he can look to bring in a player he was sad to lose previously and who he can work with to recapture his past form.