The France international, 30, has been with the Gunners since 2007, but was recently linked with moves to Monaco and Paris Saint-Germain.
Sagna is also out of contract at the end of the season, but Wenger says that he is confident of coming to an agreement.
"Yes, that could be decided in next two weeks. It looks positive. It would be a great boost, of course," Wenger is quoted as saying by The Mirror.
The defender has started 11 Premier League games so far this season.