The 28-year-old, who signed from West Ham in January 2009, has two years left on his existing deal.
But having been named the Potters' Player of the Year last season, Etherington is looking to agree an improved deal to put him on a par with the club's biggest earners.
Negotiations have already begun and manager Tony Pulis believes the two parties have almost reached an agreement.
"Matty and his agent have just had another meeting with (chief executive) Tony Scholes and from what I hear they are definitely getting closer," he told The Sentinel.
"I'm obviously hopeful they can tie up the loose ends because I'm sure Matty just wants to get back to doing what he does best.
"Not that I think any of this would have any effect on Matty's commitment or anything.
"He's a great lad and you only have to look at his performances to see how well he's done for this football club."