Hughes signed a three-year deal when he was appointed as Tony Pulis' successor at the Britannia Stadium in May 2013.
The former Manchester City boss has enjoyed success in Staffordshire, guiding Stoke to a first top-half finish in the Premier League last term and generating further optimism ahead of the current campaign with the high-profile signing of Bojan Krkic from Barcelona.
Bojan has played an integral role in putting Stoke on course for a second successive top-10 finish and the club's board appear keen to ensure Hughes is rewarded for his achievements to date.
Hughes has also expressed a willingness to stay with a club that offered him a route back into management after his unsuccessful stint with QPR.
"I’ve had discussions and they are ongoing, but they are very much at a preliminary stage," the Welshman is quoted as saying by The Sentinel.
"I don't underestimate the opportunity I was given here and that always comes into my thinking if the club ever wanted to extend my contract.
"So I'm open to that because they could have easily given this job to somebody else, but didn’t and I’m very respectful of that.
"And it's also fair to say I am very happy here at Stoke."
Stoke sit 10th in the table and face Rochdale in the fourth round of FA Cup on Monday having won four of their last six matches in all competitions.
