Currently, approver can be any party present in system (requestor him/ her), party lookup is present over create leave form. Have a look -
I have just added party lookup for find leave approval screen only. Previously, there was a find text field where any partyId can be entered to find. I am not sure whether we should restrict any party to be an approver. If we restrict it then we need to consider the create leave form's party lookup field first.