The 26-year-old Senegal international made five appearances during his three-year period at Old Trafford before signing for the German club in January 2012.
Coates told BBC Radio Stoke: ‘We’re hopeful that Diouf will be done.
‘He’s the striker Mark Hughes wanted last year. We thought twice we’d got the deal done only for the deal to collapse, as it does in football.
‘We’ve got a few irons in the fire with other players. Tony Pulis had a preference for leaving things late. I wasn’t always sure he was right but that’s what he felt, so we tended to go down that path.
‘Mark would rather do things earlier. They’re all different. The outcome is the important thing.’