It's believed a fee has been agreed between the clubs but wages could be a stumbling block.
"DJ will always score goals, but he belongs to Leicester and that's a problem," said Holloway in the Blackpool Gazette.
"I know what his wages are now and they've gone up because they got promoted. They also paid a big fee for him.
"So in realistic terms is he going to be a permanent Blackpool player? I can't see us getting him in a million years to be honest - but never give up is my motto.
"He enjoyed it here and you never know. I wouldn't rule out trying for him.
"It depends how he is thought of now they've gone up. Do Leicester want him or want rid of him? Who knows?
"As a staff we will sit down and talk about it and see what happens."