Rafa Benitez has held 'positive talks' with Javier Mascherano over the midfielder's future at the club.
The No.20 has returned to top form in recent weeks following a summer of newspaper speculation and Argentina's struggles for World Cup qualification.
And Benitez said: "We were talking with him and his agent a month ago about our idea and his idea.
"He's doing really well and has come back to his best. We were really pleased to talk to him to make progress. We have plenty of time but we are happy with him and he is happier now, too.
"He has two more years on his contract, we were talking before and we will sit down sooner rather than later and talk about the future.
"The last conversations that we had were very positive."
Meanwhile, Benitez is hoping to tie up a new contract for Pepe Reina over the coming months.
"We are very happy with him," said the boss. "He has been improving every single year and he will improve more because goalkeepers have more time in their career.
"He's always positive and he's one of the best in the training sessions because his attitude is always good.
"It depends on the agent and what the player wants but Pepe is very happy here in Liverpool so I don't see a big problem.
"The teammates love him because he's a very good example."
The No.20 has returned to top form in recent weeks following a summer of newspaper speculation and Argentina's struggles for World Cup qualification.
And Benitez said: "We were talking with him and his agent a month ago about our idea and his idea.
"He's doing really well and has come back to his best. We were really pleased to talk to him to make progress. We have plenty of time but we are happy with him and he is happier now, too.
"He has two more years on his contract, we were talking before and we will sit down sooner rather than later and talk about the future.
"The last conversations that we had were very positive."
Meanwhile, Benitez is hoping to tie up a new contract for Pepe Reina over the coming months.
"We are very happy with him," said the boss. "He has been improving every single year and he will improve more because goalkeepers have more time in their career.
"He's always positive and he's one of the best in the training sessions because his attitude is always good.
"It depends on the agent and what the player wants but Pepe is very happy here in Liverpool so I don't see a big problem.
"The teammates love him because he's a very good example."