Malouda struggled after signing from Lyon for £13.5million in 2007, but has won over fans and the Stamford Bridge hierarchy in the second half of the season.
CSKA Moscow star Yuri Zhirkov had been lined up to replace him and today warned he would not be happy to sit on the Blues bench.
Oui! Florent Malouda is set to be offered a prolonged stay at Chelsea after impressing in the FA Cup final
Versatile Zhirkov, who tends to play left-back for Russia, said: 'Clearly we are talking about one of the best clubs in the world, who regularly compete at the highest level.
About turn: Yuri Zhirkov is keen on Chelsea - but not to sit on the bench
'It is very possible I would say yes (to Chelsea). But before that I would have to weigh up the pros and cons.
'To sit on the bench and only get on the pitch from time to time doesn't interest me, not even at Chelsea.
'Moreover, I have nothing to lose (by staying in Moscow), given that CSKA now have a very interesting team who will begin competing in the Champions League in the autumn.'
Chelsea are understood to be close to an £18.6million deal for the 25-year-old, but face competition from Bayern Munich.
Malouda has only 12 months of his deal left to run but is expected to get a two-year extension with a pay rise from £50,000 a week to around £65,000 a week.
'We will have a meeting at the beginning of June,' he told the London Evening Standard. 'Both parties want to carry on.
Gold star: Alex has done enough to win a new contract at Chelsea
'It's a wonderful experience but just the beginning. I hope in the next years you will see me win many, many trophies.
'When you play so many high-profile games you get the experience and confidence that comes with it. I hope to share joy and happiness with the fans.'
When asked if he is ready to compete with Zhirkov should he arrive, Malouda added: 'Of course. It's just the beginning because with Ashley Cole on the left we have confidence so it gives us a lot for the next years.'
Alex is also going to be rewarded for a number of impressive displays this season with a three-year
deal that will see his salary increase to £60,000 a week. His current contract expires next year but the new agreement will ensure the defender remains at the club until 2013.
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