The 28-year-old, who signed from West Ham in January 2009, has two years left on his existing deal.
But 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."
Etherington's form had some suggesting he may be rewarded with an England call-up ahead of the World Cup, just like Ryan Shawcross.
But like his Stoke team-mate, Etherington's momentum was stalled by injury, denying him the opportunity to push himself into contention for a ticket to South Africa.
However, Pulis believes that despite those personal setbacks, his key duo will come back hungrier than ever next season.
"Like Ryan Shawcross, he's bound to be disappointed, and rightly so because both were desperately unlucky," added the Stoke boss.
"If they hadn't both got struck down by injury at just the wrong time earlier this year, who knows? But I'm confident that won't have any effect on them next season.
"They'll be just as keen to get out there and not only reproduce their best form from last season but improve on it.
"That's the challenge for both of them - and the rest of the lads if we are to build on our progress so far."