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A shortlist of four potential new managers have been drawn up
Hendry, who earned 51 international caps and scored three goals, has spent a year out of the game looking after his wife who had a life-threatening illness.
The former centre-back played 628 games in his domestic career, including leading Blackburn Rovers to the Premiership title.
Scottish champions Rangers also once paid £4million for his services, and Scunthorpe's link with the Ibrox club may be extended if he comes in to the club.
He left Rangers to return south of the border, playing for Coventry then Bolton before finishing his career with loan spells at Preston and Blackpool
His international career ended when he was given a six-match ban for elbowing San Marino's Nicola Albani in March 2001, an incident which briefly saw the player stop breathing.
*Mick Buxton is believed to be a name on the shortlist. Buxton, who has already had two spells with the club as manager, was a guest in the director's box for Saturday's 2-2 with Rochdale.