The Danish shot-stopper is reportedly on the wishlists of Arsenal, Southampton and Serie A side AC Milan.
Schmeichel helped Leicester to the Championship title to lift them back into the English top flight for the first time since 2003-04, and Pearson is desperate to hold onto his number one custodian.
"I've been informed that there's been speculation," Pearson said, of the interest in Schmeichel.
"That goes with the fact he's had an exceptionally good season. He's a talented goalkeeper and it doesn't surprise me.
"But he's a key player for us and I'd love to keep him.
"I've spoken to Kasper on a number of occasions and talks are ongoing.
"We have an exceptionally good relationship, player to manager, and all I can say is the player knows exactly how much I want to keep him."
Schmeichel's contract expires in the off-season, along with that of coach Pearson, who said he is not worried about an extension as it stands.
"That is something which would be nice to be concluded at some point," he said.
"I'm not worried about it and looking forward to managing Leicester City in the Premier League. That is up to my representatives and the club to sort out in good time."
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