The attacker will ink new terms to 2030 when he turns 18 this summer.
At the announcement of coach Hansi Flick's new contract to 2027, Deco also discussed Yamal's situation.
He said, "He is on the right track. First of all, we see that he has extraordinary maturity. We are happy with him and we have to enjoy him. It is a unique experience that happens every few years, to see a player with so much confidence and quality, but we must not forget that he is 17 years old.
"No matter how mature he is, he is still 17 and he has to live his life at that age. The world at his age is very complicated and he must just try to be happy. He must have a fair contract, worthy of his qualities. He must not be the highest paid or the lowest, he must be appreciated for what he is. There is no better club than Barcelona for him."
On offers for Yamal, Deco also said: "Yes, there were offers last season, not this one. We all know what we are talking about and how much he is worth. When you don't want to listen to offers, it's useless. But clubs always ask. PSG asked, Real Madrid didn't."