Redknapp has been a long-term fan of the striker, who was one of the stars of last year's World Cup. And this interest has been confirmed after the former Portsmouth boss watched the Uruguay international in the Spanish capital, during Atletico's 1-0 defeat to city rivals Real Madrid.
However, Redknapp did say that Forlan would have to take a reduction in wages should the former Manchester United player want a move to White Hart Lane.
"He's an interesting player," admitted Redknapp upon his return.
"I didn't speak to anyone last night about him, I just went and watched the game really.
"Diego Forlan has been mentioned but we are not going to get near their wages. They are on 100 grand-plus a week, they are not going to come here."
Another Manchester United player Redknapp has been linked with is Villareal's Giuseppe Rossi, who is currently having an excellent season with El Madrigal, but Redknapp has said he is 'not available', along with Porto's Hulk; another player to attract attention from Spurs.
The 63-year-old has appeared to completed his attack, by signing South African midfielder, Steven Pienaar, although he has made it clear that he will not be guaranteed a first-team place, due to the form of Gareth Bale and Aaron Lennon.
"I couldn't sit here and say he will take someone's place. There is competition for all places," Redknapp commented on Pienaar.
"He can play in several positions across midfield. He keeps the ball and he'll enjoy playing in our team."