The Lilywhites boss is up against Newcastle United’s Rafa Benitez, Chris Hughton at Brighton and Leeds’ Garry Monk for the honour.
In October, PNE beat Aston Villa, Huddersfield and Norwich, while they drew with Brighton and were beaten by Newcastle.
The division’s form table, which covers a slightly longer period – eight league games from late September to the weekend just gone – sees North End in third place.
Five wins, two draws and one defeat came during that six-week period.
Announcing Grayson as one of the nominees, a statement from league sponsors Sky Bet said: “He made light work of fixtures against the top four in the table to guide his side to three wins and a draw from five games as they climbed into the upper half.
“Most impressive of all their results was a 1-0 win away to Norwich.”
The manager of the month winner will be announced tomorrow morning.
Among those on the judging panel are former Ipswich boss George Burley and Sky Sports pundit Don Goodman.
Grayson is happy with the run of form North End have been on.
Saturday’s 3-1 victory over Rotherham at the New York Stadium sent them into the international break in a positive frame of mind.
Said Grayson: “We are pleased with how we are progressing.
“We had a good October and a good start to November with the Rotherham result.
“When we lost five of our first six league games, we didn’t get despondent and by the same token, we will not get carried away at the moment.
“We will keep working hard and see where that takes us.
“We aren’t in the same league as some other clubs in terms of their budgets but we have some good players here and a fantastic work ethic.”
The North End squad have been in training this week but will get time off over the weekend.
They resume action against Wolves a week on Saturday at Deepdale and then host Burton the following weekend.
Grayson said: “We are on a good run of form but I still think the break has come at the right time for us.
“It was the same last month, we had just beaten Aston Villa and were able to do some work on the training ground to make sure we were right for the next block of games.
“The schedule is not so intense this time, with only two Saturday games in the remainder of November.
“But once we get into December, the fixture list gets busy again.”
Burton will be without Kyle McFadzean when they visit on November 26, the centre-half having been given a four-game ban by the FA for violent conduct during last Saturday’s game against Barnsley.