The Algeria international only joined Milan from Empoli last summer and will see his contract at San Siro expire until June 2024.
Despite increased speculation about a move away from Rossoneri in recent days. though, with Los Blancos thought to be interested in his signature.
The defensive midfielder has made 23 appearances for the Serie A giants during the 2019-20 campaign and was named the Best Player of the 2019 Africa Cup of Nations.
According to French outlet Foot Mercato, Real Madrid have been impressed by the 22-year-old midfielder’s development, and the La Liga giants are now exploring the possibility of a summer deal.
Bennacer’s release clause stands at €50m in his current contract.