Dawson, who spent the majority of his career at West Bromwich Albion before moving to Watford in 2019, has made over 180 appearances in the top flight.
"It's no secret that we've been trying to add more quality to the squad in defensive positions, not only for the longer-term but also to ensure we are well protected right now. West Ham made unsuccessful bids to try and sign James Tarkowski from Burnley while Chelsea defender Fikayo Tomori was also linked with a loan move.
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