The 25-year-old's current deal expires in the summer, meaning he will be free to talk to other clubs.
"Actions speak louder than words. He has to make a decision in the next few weeks as to whether he's committed to staying," Levy told BBC Radio Five Live. "That's what he says to me and to the fans, so I very much hope he'll sign a new contract."
Defoe's fellow striker Dimitar Berbatov has been linked with a move to Manchester United.
The pair are in competition with Robbie Keane and £16.5million summer signing Darren Bent but Levy does not expect any of them to leave White Hart Lane either in the transfer window or next summer.
"If you have top-class strikers and they want to be in a top club, every top club has at least four strikers, so their situation wouldn't be any different if they were at Manchester United or any other big clubs, so they just have to fight for their place," he said.
"We don't intend to sell any player who we don't want to sell in January and I'd be very very surprised if any of our senior players weren't here next summer.
"I can only go on what they're telling me and, from what they say publicly, as with Jermain, they've made it very clear they want to stay here."