Under the proposed deal, Hasbro would pay a mix of cash and stock, though an exact price has not been determined yet, the newspaper reported.
DreamWorks spokesman Matthew Lifson and Hasbro spokeswoman Julie Duffy said separately that the companies do not comment on rumors and speculation.
The talks with Hasbro come more than a month after discussions with Japan's Softbank fell apart, with one source citing price as a dissuading factor.
Negotiations between the Hasbro and DreamWorks are continuing and may still fall apart, the newspaper quoted the people as saying.
DreamWorks shares closed at $22.37, giving it a market value of $1.91 billion. Hasbro stock closed at $57.47, with a market capitalization of $7.22 billion.