Burton and South Derbyshire could now see blue badges handed to people with "hidden disabilities" such as dementia and autism.
This follows new Government guidance announced earlier this week by Department for Transport Minister Jesse Norman.
Blue badges, introduced in 1970, allow people with disabilities to park on roads without a charge or a time limit.
The aim is to "help remove barriers to travel for people with conditions such as dementia and autism, allowing them better access to work, shops and amenities".
Currently, about 2.4 million disabled people in England have a blue badge, allowing them to park on roads without charge and normally without time limit.
Derbyshire, Leicestershire and Staffordshire county councils, which distribute the blue badges, have hailed the new changes.
Alan White, deputy leader and cabinet member for health, care and wellbeing at Staffordshire County Council said that the improvements would be "more inclusive".
He said: "The blue badge scheme gives people with disabilities increased freedom to get out and about where and when they want by allowing them to park closer to their destination.
"Extending the scheme to people with hidden disabilities would be more inclusive and would mean that more people with difficulties are able to visit shops and friends and get to work with as much ease as possible.
"We'll be following the proposals closely and amending our guidelines as required."
Meanwhile a spokesperson for Leicestershire County Council said: "We would welcome clear and consistent guidelines on blue badge eligibility so we’ll now be looking at the Government proposals in more detail."
A spokesperson for Derbyshire County Council said the improvements are "vital".
They said: "The blue badge scheme is vital to help people with a disability get out and about.
"We look forward to hearing the outcome of the Government’s consultation on extending the scheme."
The changes could also see a variety of healthcare professionals carry out assessments to determine if a blue badge should be given.
Councils have different interpretations of the existing rules with some recognising hidden disabilities, but the changes proposed would give a clear and consistent guidelines for the whole of England.
Transport Minister Jesse Norman said that the wider coverage would allow people with disabilities freedom to "get out and about".
He said: "Blue badges give people with disabilities the freedom to get jobs, see friends or go to the shops with as much ease as possible.
"We want to try to extend this to people with invisible disabilities, so they can enjoy the freedom to get out and about, where and when they want."
The consultation on the possible improvements will last eight weeks.
