The package includes a salary of $151,125 a week — or $7.9 million a year, according to the tabloid.
The 31-year-old England striker has eight goals in 13 appearances this season, but finds himself behind Roberto Soldado on the Spurs' depth chart. Tottenham, flush with money from the sale of Gareth Bale to Real Madrid, spent 26 million pounds ($43.7 million) to get the Spanish international this summer.
Toronto FC manager Ryan Nelsen played for Tottenham and visited the Premier League club's training ground recently during a talent search with GM Tim Bezbatchenko and MLSE boss Tim Leiweke.
The Mirror says Queens Park Rangers, Nelsen's last team, is also vying to sign the five-foot-seven Defoe, who has won 54 caps for England with 19 goals.
Toronto (6-17-11 this season) has said it wants to sign two designated player strikers during the January transfer window.
U.S. captain Clint Dempsey is currently the highest-paid player in MLS, according to the latest figures from the MLS Players Union.
The former New England Revolution, Fulham and Tottenham forward is making US$5,038,566.50 with the Seattle Sounders this season