The 27-year olds contract expires at the end of the season and following his recent successful return from injury, the Blues are keen to retain him at Stamford Bridge.
New chief executive Ron Gourlay confirmed that the club and Cole were in discussions about a new deal for the England international.
"We are already in discussions with Joe," Gourlay told Chelsea TV.
"The situation is that he is coming to the end of his contract, he is 28-years-old on the day of the Manchester United game and we're entering into the period where Joe is looking to negotiate his new contract.
"That process has started, Joe has made it very clear that he wants to stay with the football club and I'm sure in the coming months we will be able to work something out."