Walcott’s current deal runs out at the end of the season and the 23-year-old forward is free to talk to other clubs from January.
But, following the former Southampton man's hat-trick in Saturday's 7-3 win over Newcastle, Oxlade-Chamberlain - a Saints academy graduate himself - hopes that the contract saga will soon be put to rest.
"We’ve all been giving him a bit of banter but that’s for Theo’s people to sort out.” Chamberlain told the Daily Mirror.
|11/2||Theo Walcott is 11/2 to open the scoring when Arsenal take on Southampton with Bet365|
"His hat-trick was amazing. You could see after his first goal that he had a spring in his step. He was sharp, good going forward, and he’s been like that all season.
"The goals are coming for him as well. He’s got all the attributes. He’s proving he can do a really good job for us up there.
"He bangs them in for fun in training. Someone with pace is a nightmare to defend against. When he gets the service he can punish teams and in training he’s no different.
"He went out wide for the last 10 or 15 minutes, put in that cross for Olivier Giroud – that shows he can play anywhere up front as well."
Oxlade-Chamberlain went on to hail Walcott's maturity, and revealed he has been a big help to the youngster since his breakthrough at the Emirates Stadium.
"When Theo first came, he was training with players like Thierry, [Dennis] Bergkamp and [Robert] Pires," he added. "I’m sure he’s learnt off the best, he’s getting better and better and there’s no one better to learn from.
"From the player that I first started watching to the man he is now, he is only getting better and better, and he’s still only 23. He’s got such a mature head on his shoulders. He’s great on and off the pitch so he’s so important for us.
"He was great for me when I first arrived. He took me under his wing, helped me. When he came along it must have been even more daunting because I think Ashley Cole was the only English player around here at the time.
"He was the first person to really help me. I sit next to him in the dressing room and he’s been really good for me."