The 32-year-old, who has featured over 200 times for the Gunners since arriving from Malaga in 2013, is due to be out of contract next summer.
Monreal revealed this week that he is "really happy" in North London and wants to stay on for longer, and the feeling is mutual as Emery hopes to reach an agreement on fresh terms.
"First, I knew Nacho Monreal in Spain when he was playing for Malaga. I knew him," he told reporters at his pre-Newcastle United press conference.
"After two months now, I can say I am happy with him. He is 32 years old, physically the performance with us, Nacho is playing with a very good level.
"The reason for that, for me, we need to find a new contract with him to stay together with the Arsenal team."
Monreal, capped 22 times by Spain at senior level, was recently linked with a move to Barcelona.