The Canaries are looking to overhaul their frontline this summer and have already held talks with Scunthorpe striker Billy Sharp after agreeing a £2million fee with the Iron for his services.
But they will have to up their bid for Eastwood if they are to sign him as well.
Wolves had a £1million offer for the 23-year-old rejected earlier this summer but even Norwich's improved bid leaves him "dramatically undervalued" according to Southend chairman Ron Martin.
He told the Evening Echo: "Norwich have made a bid for Freddy but I have told them that they are not offering enough.
"Freddy is worth a lot more to this football club than £1.5million. That is what I've told Norwich and I still don't want him to leave."