Milner rescued City in the third round of the FA Cup on Sunday, scoring two second-half goals - the winner coming in the first minute of injury time - as City came from behind to beat Championship side Sheffield Wednesday.
The former Leeds United, Newcastle United and Aston Villa midfielder is out of contract at the end of the season, and Pellegrini is eager to ensure that the 29-year-old remains at the Etihad Stadium.
"There is no news on the contract for the moment. But I hope we will find an arrangement," Pellegrini said.
"I've said already what I think about James Milner. He's a very useful player.
"I brought him on in our last game as a substitute and I think he made more chances than a lot of players, three or four clear chances.
"But he always plays at 100 per cent commitment and intensity for the team so I am happy with him."
