However the Ipswich chief is aware of the club's fragile state.
"We may be out of administration but things are still tight," said Royle.
"We have to be very careful but we definitely want to do something."
Mahon joined Rovers in 2001 from Sporting Lisbon where he'd failed to settle.
Souness however gave the Irishman a chance and signed him for £1.5million.
Though after failing to gain a regular place in the Rover's side he was loaned out to Cardiff and presently to Ipswich.