"We'd all like to see Ish stay," said the former Sunderland hitman, who has bagged 10 of the 17 league goals scored between them.
Albion are believed to have agreed an undisclosed fee with City which means that, should the Baggies wish to take up the option, the final option will rest with Miller.
Phillips says he should just stay focused on playing football for now, though, adding in the Birmingham Mail: "It's important he feels more settled now. He can forget about his little trips up and down the M6 and concentrate on his Albion career.
"If he still wants to play for City, the best way to get a good look-in there is to do the business here and he's certainly doing that at the moment.
"I just hope he continues doing that and stays focused for us because he's been tremendous.
"He's only a young kid and home-grown player. It can take players time to settle but he hasn't.
"He's a great character and he's not afraid to chirp up in training and have a go at someone."