Premier League Stoke City were one of a number of clubs looking very closely at the former Blackburn and Manchester United striker - who has been impressive since moving to Germany.
Diouf has scored 20 goals in 32 starts for Hannover since first joining them in January 2012.
With Diouf's current deal due to expire next summer, Hannover are working hard to try and keep him.
Hannover boss Mirko Slomka told Sport1: "Dirk Dufner [General manager] is busy with those negotiations.
"He is trying to keep Mame Biram Diouf at our club for longer than the end of the season.
"I think we have strong arguments to convince him to sign a new long-term contract at our club. I am confident."