The Argentine striker has enjoyed impressive form under coach Walter Mazzarri this season.
"My agent is talking with the club. I'm kept up to date with how it is going. We'll talk this week and the next," said Palacio.
On new signings next month, he added: "If there is something and it turns out, great, even though we have so many strong players. They're too young, they need experience.
"But the coach will have to decide what role the team will need to strengthen."
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