President Justino Compean revealed the contract talks on Friday, saying the coach also wants to continue his national team duties.
"We're renewing Miguel Herrera's contract so he stays as coach of the national team for Russia 2018," Compean said at a news conference in Rio de Janeiro. "We're going with him and hopefully he lasts."
Compean said a contract agreement should not encounter any major difficulties.
Mexico advanced to the round of 16 despite facing a challenging group that included hosts and group winners Brazil. El Tri then fell at their first knockout stage hurdle for the sixth straight World Cup.
"His work was extraordinary" Compean said of Herrera. "We're pleased because in the short time he had to work, he did it very well, achieving very good results in the style of play and in what the national team transmitted."
Compean then discussed upcoming friendlies, saying Mexico is likely to play in the Netherlands in November, with two more friendlies scheduled in Mexico and two in the United States coming before the end of the year.
Mexico also announced an agreement with adidas to provide their official kits through the 2022 World Cup.
Mexico, Herrera nearing contract extension
The Mexican football federation wants Miguel Herrera to remain as Mexico coach with an extended contract through the 2018 World Cup.
Men in Blazers: Favourite World Cup memories
The Men in Blazers, Roger Bennett and Michael Davies, share their favourite World Cup memories and pay tribute to none other than Mexico coach, Miguel Herrera.