The 50-year-old’s current deal is due to expire in 2016, with French newspapers suggesting earlier this month that a new deal was being negotiated.
Speaking in a press conference previewing PSG’s league match with Lorient this weekend, Blanc revealed conversations have began.
"We are talking with the club about extending our contract,” he said.
“At the moment nothing has been finalised, but we are in discussions.”
Blanc has won eight trophies with the club since taking over from Carlo Ancelotti in the summer of 2013.
Prior to taking on the PSG job, he managed France between 2010 and 2012 following a three year spell in charge of Bordeaux.
As a player, he represented Montpellier, Napoli, Barcelona, Marseille, Inter and Manchester United, among others, and won the World Cup with France in 1998.
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