The 22-year-old joined Liverpool from Levski Sofia in 2007 but was loaned to Dutch champions Twente after failing to obtain a work permit due to his lack of international appearances.
"Liverpool are a huge club," Mihaylov told Darik radio. "It wasn't possible to get a work visa when I went there but now there'll be no such problems because I'm playing regularly in the national team."
Twente signed Mihaylov last year on a three-year contract but Liverpool included an option to re-sign him before the end of the deal.
"I think it's absolutely real," said Mihaylov when asked about the possibility of returning to Liverpool. "The option was made when Rafa Benitez was in charge.
"I know from my agent that Pepe Reina wants to go back to Spain. His desire dates back from one or two years.
"It's not difficult to see this. I know him well, he's one of the best keepers in the world but his current form is not as it should be in a club like Liverpool."
Mihaylov, capped 16 times by Bulgaria, is son of Bulgarian Football Union president Borislav Mihaylov, who was elected on to UEFA's executive committee last week.
Borislav played more than 100 times as goalkeeper for the Balkan country and Nikolay's grand-father Biser also kept goal for the national team in the 1970s.