Guidolin's short-term contract with Swansea is due to expire this summer and he is one of the names being linked with the Watford post.
Quique Flores took over at Vicarage Road last summer and has helped the newly-promoted Hornets to a safe position, but their struggles in the second half of the season have cast doubt over the Spaniard's future.
"I read something about Watford and, yes, I worked with the Pozzo family for five years in Udinese," Guidolin told reporters.
"We worked very well together, we were a little club in Italy and many younger players, like Alexis Sanchez for example, were good business for Udinese in going to big teams.
"In five years we were four times in the European positions, two in the Champions League playoff and two in the Europa League. We got to one semi-final of the Italian Cup and my memories are very good there, but I don't know what happens at Watford."
Flores revealed today that there is a break clause in his Watford contract, fuelling speculation that he could leave this summer.