Hughes who has had offers from six clubs, joined City from Charlton last year on a one year deal with a rumoured £500 a week salary and became an over night hit with the supporters.
The Player and Players' Player Of The Season has been offered terms quoted as "being greatly improved".
Mike McGinnity who is now dealing with contract negotiations said: "I understand that Stephen Hughes is back from his holidays so I am keen to speak to him as soon as possible."