The Germany international is left with a year on his current deal and is yet to put pen to paper but Nagelsmann remains hopeful.
Goretzka has been at the Allianz Arena since the summer of 2018 after signing for the club from the-then Bundesliga rivals Schalke 04.
He has since become one of the most important players for the Bavarian giants, having played over 110 games in all competitions scoring 25 goals and providing 27 assists.
The 26-year old has also won the Champions League title and three Bundesliga titles since he moved to Munich.
He is currently linked with a move to play in the Premier League for Manchester United but the German coach says he thinks his compatriot will stay put at Bayern Munich.
“I’m not involved enough that I have a say every day. I stay out of these issues,” Nagelsmann told reporters [via CBS Sports].
“Of course I have talked to him about my plans for him. I’ve told him I’d be happy if he extended and I’m also confident. There are several topics involved when it comes to discussing a contract extension.
“I’ll continue to focus on the sports side of things and show him he can be one of the most dangerous midfielders in Europe. He has potential to get even better.”