The Spain midfielder's contract expires at the end of the season, but his team-mate has urged him to extend his deal
The Spain international's current deal runs out at the end of the season, with some rumours linking the midfielder with a return to former club Liverpool.
But Madrid boss Carlo Ancelotti is determined to keep hold of the 32-year-old, particularly in light of Sami Khedira's long term injury and those sentiments have been echoed by Pepe.
The 30-year-old told reporters: "Xabi is a great player. we are happy with him and we hope that he renews soon, but we have still not heard anything."
Los Blancos ran out 2-0 winners over Olimpic de Xativa in the last-32 of the Copa del Rey on Wednesday night. Asier Illarramendi's 15th minute strike and a 25th minute penalty from Angel Di Maria ensured Madrid's progress ahead of their Liga clash with Valencia on Sunday.