Joe Royle is suing former club Manchester City for unfair dismissal following his sacking in May.
Royle wants an extra payment on top of the Stg£200,000 pounds ($295,800) compensation he received when forced out of Maine Road, believed to be in the region of Stg£500,000.
"The matter is in the hands of my solicitors and that is all I can say," he told the Manchester Evening News. "The issues at stake are the level of settlement and unfair dismissal."
Papers have already been lodged in the High Court by a Manchester law firm acting on the 52-year-old's behalf.
City chairman David Bernstein made it clear the club will defend the action. "This is not a matter I wish to comment on, but clearly the club will strongly defend this unnecessary action," he said.
Royle was in charge at City from February 1998 and took them from the second division into the premier league, but he was sacked in May after they lost their top-flight status.
Former England coach Kevin Keegan took over from Royle and City currently stand in sixth place in the first division with 18 points from 10 games. -Reuters