The film is set in a school of music in North London and will feature the "Hate Story 3" star as a music student.
"As of now we have finalised only Zareen, she is playing the female lead. We are looking for one male actor for the other role. I liked her in 'Hate Story 3' and I genuinely believe she is the most undervalued actress we have," Bhatt told PTI.
"'1920' films are set in a period time zone and they require a certain body type for actors. The body type, body language should be such that they look right in any era. Zareen, that way, is timeless. She is perfect for the role," he said.
The "Love Games" director wrote the recently released "1920 London", the third instalment in the "1920" franchise and will kick start his own banner - Loneranger Productions - with "1921".
Bhatt said "1921" will have a strong romantic premise which was missing in the last two instalments of "1920".
"It (the film) is like '1920 2.0'. There is nothing wrong with the '1920' franchise, but I thought why not better it. In the last two parts, there was less romance as compared to the first one. '1921' will have strong romance and love story," he said.
The 47-year-old director had also helmed "1920" and wrote "1920 Evil Returns" and "1920 London", which starred Sharman Joshi.
The filmmaker, who has worked in horror franchise like "Raaz" and has been associated with films like "Haunted 3D" "Shaapit" and "Creature 3D", says his new movie will focus more on "grabbing your heart" along with "great scares".
"The film will have great scares and great love. Horror is the easiest thing to create but what I want to give the audience is a strong story. I want to grab your heart with this film and not just frighten," he said.
The film will go on floors this November and will release in 2017.
