The number of loan players at Watford last season stretched to 14, and 10 of them came from just one club: Italian side Udinese. The Pozzo family who own the Hornets also own the Serie A club, and some other players have come from another club owned by the family, Granada in Spain.
The use of foreign loan players circumvented Football League rules which restrict match-day squads to five domestic loan players, with a maximum of four from any one club.
The Football League's 72 clubs meet today in Vilamoura, Portugal, where they are expected to bring the overseas loan player rules into line with the domestic regulations.
Watford's use of the system led to a number of complaints and the league appointed its working party on player-related issues to look into the matter and it has come up with the proposals to close the loophole.
A majority of 51% of clubs, and 51% of Championship clubs, is needed but the proposal is expected to receive overwhelming support.
Watford's loan players included the Championship player of the season Matej Vydra, the Czech striker.
The Hornets found themselves publicly criticised by Crystal Palace manager Ian Holloway in February after naming seven loan players against his team. Holloway, who called the overseas loophole "ludicrous", had the last laugh after his side beat Watford in the Championship play-off final to win a place in the Premier League.
The AGM will also discuss Football League chairman Greg Clarke's announcement that he is to move from an executive to non-executive role and a chief executive be appointed.
Clarke is likely to face criticism from some clubs over his failure to secure a major sponsorship deal and over his handling of negotiating solidarity payments from the Premier League. It has been reported that the criticism could even progress to a no-confidence vote in Clarke.
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