Palmer was traded to Arizona from the Oakland Raiders in April 2013. He signed a three-year deal, which will be voided if he is on Arizona’s roster five business days after Super Bowl XLIX, which takes place at University of Phoenix Stadium in Glendale, Arizona on Feb. 1.
Palmer is making $9 million this season.
"I won't get into specific points of the negotiations but we've had some dialogue with Dave Dunn," Cardinals general manager Steve Keim said to the Arizona Republic. "He (Palmer) has done a great job for us."
Palmer, 34, has missed three games this season because of a bruised nerve in his right shoulder. He played in last Sunday’s 30-20 win over the Washington Redskins, throwing for 250 yards and two touchdowns.
Last season, Palmer threw for a career-high 4,274 yards, leading the Cardinals to 10 victories.
Palmer has completed 64 percent of his passes for 554 yards, four touchdowns and no interceptions in two starts this season for the Cardinals (4-1), who play the Raiders (0-5) on Sunday.
- Scooby Axson