The unpopular Domenech's contract ends after the June 11-July 11 finals in South Africa and Girondins Bordeaux coach Blanc, who featured alongside Deschamps in France's 1998 World Cup-winning team, is the overwhelming favourite to replace him.
"It's very good, it's a very good choice," Deschamps, the coach of Ligue 1 champions Olympique Marseille, told French sports daily L'Equipe in a video posted on their website, in answer to a question suggesting Blanc had made up his mind.
Asked whether Blanc had told him he would be appointed France coach, Deschamps said: "With Lolo (Laurent), it's different. We're friends, we talk about everything, and for a long time, so we talked about that, but that's between us."
Deschamps was seen as a possible candidate but has made it clear he would not take the job.
Domenech has faced criticism since France's Euro 2008 flop where they failed to make it past the group stage and is booed at every match.
His side needed a controversial play-off win over Ireland marred by Thierry Henry's infamous handball to qualify for the World Cup, where they will face South Africa, Mexico and Uruguay in the group stage.
The name of Domenech's successor is likely to be announced at a meeting of the French Football Federation (FFF) on May 20.
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