The academy graduate broke into Wanderers' first team at the end of last season and has firmly established himself as a regular at the heart of Kenny Jackett's defence this term, starting 23 of the club's 24 matches.
Batth will be out of contract in the summer and Wolves have been in lengthy negotiations as they look to tie the 23-year-old down to fresh terms.
"Danny Batth's representatives and the club are currently in negotiations about a new contract - that is happening," head coach Jackett told the club's official website.
"Those negotiations are ongoing and we'll see how they go. It's not something that's been pushed aside by the club or anything like that.
"He's a player we're all very keen on and been pleased with and I think I've picked him in every game and that does show what I think of him.
"When Sam Ricketts has been out, Batth has been captain on most occasions, (Richard) Stearman captaining the team in a cup game when Batth wasn't involved.
"So I'm very pleased with him and I think he has a cracking future and the club and his representatives are negotiating now in terms of talking about a new contract.
"They were in here on Monday and they're in discussions with the club now but I don't know how the talks have gone yet."