The Argentine striker is believed to want to leave the Foxes in the January transfer window, as he has only made one start in the league this season.
Coach Claudio Ranieri however reportedly wants to keep him at the King Power stadium, while it remains to be seen what kind of transfer fee Alaves, who are operating on a small budget, are willing to pay.
The 30-year-old Ulloa has 18 months remaining on his contract with Leicester.