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Sami Khedira has surely been missed since he tore his ACL on a friendly match against Italy. And apparently, the board and the coaching staff are well aware of this and have decided to give Khedira a 4M€/year contract until 2018. 'El Confidencial' s reports have not been accurate lately. They first said that Isco was going to sign with Manchester City and later reported that Xabi Alonso would decline a contract extension.
And frankly, it would be strange to see Real Madrid agreeing to such a big contract without knowing how well Sami Khedira is going to recovery from his ACL injury. Khedira's current contract expires on 2015.
Still, Sami Khedira is a very important player who provides a good balance for the squad. If he comes back effectively, it would be a very good move to keep him on the roster. Real Madrid paid just 12M€ to sign him away from Stuttgart and he's been a tremendous asset since he joined the club.