The former Manchester United striker left Old Trafford for the Bundesliga in January 2012 after failing to make an impact in his three-year stint with the Red Devils.
However, the German club's director of sport Dirk Dufner has stressed that Diouf is not for sale and instead wants to tie the Senegalese forward down to an extended deal.
"We are certainly not going to sell him," he told Kicker magazine. "He is definitely staying with us. Mame is happy in Hannover and we hope to reach an agreement [over a new contract]."
The 25-year-old scored just once in five appearances for United between 2009 and 2012.