Former Reds striker Michael Owen says Mohamed Salah's options will be "sideways to Manchester City or elsewhere" if he leaves Liverpool.
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The 29-year-old Egyptian striker's deal expires in the summer of 2023.
He has previously said he wants to stay but his future is in the hands of Liverpool while Reds boss Jurgen Klopp said the new deal was "Mo's decision".
"I would be very surprised if Mo Salah did not sign for Liverpool. What are the options at the moment?" Owen said.
“You only go sideways to Manchester City or somewhere else because there is no one else as good as these two teams in the world at the moment.
"Let's give everyone time because these things don't happen overnight.
“You are talking about one of the biggest clubs in the world and one of the biggest players in the world and this player is about to sign the biggest contract of his life.
"I think it's quite normal for the negotiations to go on for a bit," Owen told BBC Sport.
"You can't give players what they want"
Salah joined Liverpool from the Italian club Roma in the summer of 2017, and scored 153 goals in 239 matches.
He helped the club win the Premier League, Champions League, League Cup, FIFA Club World Cup and European Super Cup during his time at Anfield.
Owen, who scored 40 goals with England, started his career with Liverpool before stints with Real Madrid, Newcastle United, Manchester United and Stoke City.
Speaking at the launch of IPL Soccer - a new tournament to help British Asians showcase their talents - he believes Liverpool must not break the wage structure to keep Salah.
"You can't give the players what they want," he said. "The whole match would be a disaster if that was the case."
"Liverpool has to run it as a business. They can't, of course, give any player what they want because if they do, there are a lot of other players in the squad who would be knocking on Jurgen Klopp's door saying, 'Okay, wait a minute, if he's working on this. I have to be on it.” Then the entire structure that they built so well over the years would fall apart.
“I'm sure Liverpool are very sane, I'm sure Mo Salah and his representatives are all very sane and understand that. It's just a case of them finding common ground, and I hope everyone finds that soon.
"Mohamed Salah should think about his chances of success in the future - if he's thinking like that, Liverpool tick that box. It's just a question of whether they tick the box financially as well."
IPL Soccer will take place at Pride Park in Derby County on May 8 and feature four teams from London, Derby, Birmingham City and Leicester City, with British-Asian players selected through regional and networking trials.
A former Premier League player will be part of each team, featuring former Arsenal and Liverpool player Jermain Pennant, former Liverpool and Leicester City striker Emile Heskey, former Aston Villa midfielder Lee Hendry and former Aston Villa striker Gabi Agbonlahor.
Scouts from a number of professional clubs were also invited to participate in the tournament.
There are plans to expand the event in 2023 and include a women's tournament.