A broken leg sustained in Man City’s 1-1 draw with Chelsea in January has seen Gvardiol, 23, miss 25 games across all competitions for Pep Guardiola’s side.
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The defender is expected to be fit before the World Cup and will likely play a key role for Croatia.
According to Sky Sports, City are hoping to tie Gvardiol down to a new long-term deal despite his injury issues.
Gvardiol’s current deal is set to expire in the summer of 2028, and the new proposal will see him earn a salary increase.
The news comes days after the club secured the future of Phil Foden, despite interest from clubs in the Premier League and Europe.