The official word is that Mikel is 50-50 whether he will sign a new contract or leave either in January or in the summer, but realistically, it's probably more like that he's leaving for sure and the only question is to where and when. I'd be absolutely flabbergasted if we offered a new contract extension to a player, regardless of his legend status, who hasn't actually played a single competitive minute for the club this season. (And that's not a slight on Mikel; that's just the reality of the situation.)
In any case, as we all know and as everyone involved has said at some point, Mikel's still just 29 and thus has plenty of legs left in his career. Where those legs will take him next is unknown — there are offers supposedly from China and Turkey — but if his international teammate Odion Ighalo is right, his options should be even broader and also, much closer to home.
"I would like it if Mikel joined me at Watford. He is my captain at the national team. Apart from that he is a very good player - very talented."
"There is no team in the Premier League that will not want to have such a player. I am happy I have played with him so I will be very happy to have him in my team."
-Odion Ighalo; source: West London Sport
Mikel to Watford? Could be an intriguing option and one that would allow him to stay in the London area even.