The midfielder, who initially penned a one-year deal after arriving on a free transfer in August, has become a big fans favourite at Hillsborough following a series of impressive performances.
And speaking after the Owls’ 2-2 draw at Cardiff City today, the Scotland international said: “It (contract) is very close and has almost been agreed.
“I’m just waiting now. Hopefully it will get done in the next week or two.
“I have enjoyed it here since coming in. The fans have really taken to me.
“I enjoy the way we play football, this way suits my game perfectly and I’m thriving on it on because the gaffer has given me great confidence, so why would you want to leave?”
Bannan claimed his first goal in Wednesday colours to help Carlos Carvalhal’s side clinch a point in South Wales.
“I was due a goal and it’s a good time because we got a point from a big game for us,” he said.
“I’ve always said we have a great squad here, with a lot of talented players and we want to aim high.
“We came here to win today and if we would have, we would be top six. We want to be right up there at the end of the season.”