It's understood that Benitez would prefer to stay at Newcastle but wants assurances over his summer transfer budget.
It is expected that the contract will be signed in the coming days, and the annual salary is 45-year-old Portuguese will be 4 million euros.
Newcastle would receive £6m in compensation if West Ham were able to lure Benitez to London.
However it serves to focus on Benitez's frustration that such a state of affairs has been talked about since final summer time.
Arsenal to hold talks with Thierry Henry over manager's position
Wenger ended his 22-year reign as Arsenal boss last season with a number of potential names being mentioned to succeed him among which include Arteta.
Benitez is now in talks with managing director Lee Charnley about a new deal - with the current one expiring in 2019 - but as the Chronicle reports, interest from West Ham United in the Spaniard is holding things up.
It was previously reported that "Miners" suggested the coach to extend the contract for two years, but he is waiting for offers from clubs in the English Premier League.
In a recent statement West Ham revealed that they were eager to appoint a "high-calibre first-team manager who has a proven record both in the Premier League and European football", and Pellegrini definitely fits into that bracket.
It was in July of previous year that Benitez urged Ashley to "keep his word" over transfer funds and reminded him that he could have quit the club for a mega-money deal in China.
Rafael Nadal vs Fabio Fognini: Italian Open quarterfinal preview and prediction
Defending champion Alexander Zverev needed eight match points before completing a 7-5, 7-6 (11) win over Kyle Edmund. Fognini would upset Thiem, 6-4, 1-6, 6-3, earning a thunderous round of applause from the fans in his home country.
'Everything is in place to move forward. He said that he would give us every last penny so hopefully he will do it and I'm confident that he will.
He mentioned: 'After I had the assembly with Mike Ashley (in Might, 2017) I used to be assured that we now have the cash obtainable and the wages.
Rafa Benitez has made it clear in many press conferences that he has taken that he can work to many plans and he has stated that it isn't always necessary to spend vast amounts for the sake of it.
United Nations mulls worldwide war crimes probe of Gaza killings
Mideast envoy Nikolay Mladenov to help deter violence, protect civilians, and create "an environment conducive to dialogue". Protests began after the United States embassy was officially opened in Jerusalem on Monday (local time).