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Nasri was initially expected to miss the rest of the season with a thigh injury he picked up in October but the France international said last month that he hoped to return to action by the end of March.
"There are so many exciting things happening here. You never know what will happen in football, but it would be a pleasure to finish my career at City," Nasri told the club's website.
The former Arsenal man, who has scored one goal in eight appearances this season, said he was looking forward to rekindling his 'special connection' with midfield duo David Silva and Yaya Toure upon his return.
City, who have failed to win back-to-back Premier League games since October, have slipped to fourth in the table and will hope to get their title charge back on track when they host second-placed Tottenham Hotspur on Sunday.
