The 58-year-old oversaw the Hammers' promotion via the Championship play-offs last term, and has since led them to 14th place in the Premier League - six points clear of the drop zone.
Allardyce's current deal expires in the summer, but the former Bolton boss says that an extension should be announced soon.
|16/1||West Ham are 16/1 to be relegated with Coral|
"As always, that is not as easy a situation as you would like. You always have to do some negotiations when you are moving into the next contract, just as there were plenty of negotiations over the first contract.
"So we will hopefully come to a conclusion very shortly."
Allardyce also lauded the recent news that West Ham have agreed to move into the Olympic Stadium from the start of the 2016-2017 season.
He continued: "We need to move to this new stadium to compete with the likes of Chelsea, Arsenal and Tottenham in this world.
"I can understand why they don't want to leave Upton Park because they probably came here in their infancy and their dad, uncle or grandad brought them so they've grown to love this stadium.
"But at the end of the day, football has to progress."