On Thursday, Torino formally requested another year-long loan for Hart, who has kept three clean sheets in 30 appearances for the Serie A side.
Mihajlovic told La Gazzetta dello Sport: "Hart wants to stay at Torino but we are all aware, both him and the club, that we can't buy him.
"At the most we could take him on loan for another year but that depends on both Manchester City and him.
"We will need to know if Hart is going to be here next year because if he's not then we'll need to change the way we play."
Hart has two years left on his Man City contract but his parent club are reportedly looking to sell him this summer at a valuation of around £15m.