The German midfielder, 28, is out of contract next summer, but has already held initial discussions over fresh terms.
And Dortmund are keeping an eye on the Premier League winner, with a view to a permanent move in the next transfer window, says The Sun.
An Etihad source said: “Dortmund have had a look at getting him back. He still hasn't fully made up his mind what he's going to do.
“Talks have been slow to progress on his new contract. He is happy here but Dortmund have a history of bringing back old players."