The England midfielder has made more than 180 Premier League appearances for the Blues since arriving from West Ham in 2003.
However, the playmaker has struggled to hold down a regular place in Carlo Ancelotti's starting XI since recovering from cruciate knee ligament damage sustained in an FA Cup tie at Southend United in January 2009, and is out of contract at the end of the current campaign.
Despite reports suggesting that both the player and club are keen to agree a new deal, speculation continues to link the former West Ham trickster with a move away from Stamford Bridge, with Manchester United, Manchester City and Spurs all believed to be ready to offer lucrative contracts.
And England striker Defoe, who played alongside Cole at West Ham, says he is stunned at the prospect of Chelsea letting the midfielder slip out of their grasp.
“I can't believe Joe Cole could be leaving Chelsea,” he said in the Mirror.
“He will be out of contract in the summer if he doesn’t sign a new deal and Chelsea would lose a magnificent player.
“It’s difficult to see what the problem is. I played in the same West Ham team as Joe when we were kids and can tell you first hand his attitude is first class.
“He works as hard as anybody and can make the difference in tight, tough games.”
Defoe believes that a change of scenery could suit Cole, who is still hopeful of making Fabio Capello's England squad for this summer's World Cup finals, and that playing under a manager such as Harry Redknapp would help him rediscover his best form.
“It might be he just needs to be at a club where the manager has total confidence in him,” he said.
“You can see how a bit of faith pays off when you look at the improvement at Spurs of Roman Pavlyuchenko, Gareth Bale, Heurelho Gomes and David Bentley.
“It would be great to play with Joe again. If Chelsea don’t want him I’m sure we’d be among the clubs who would welcome him with open arms."
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