Sir Bobby Robson tracked him when he was a youngster at Crewe, and West Ham beat Graeme Souness to the deal when the two clubs went head-to-head for his services.
However, Keegan has not had the player "monitored on the radar" like the London press hace claimed this week.
The 24-year-old has two years left on his contract and Hammers chief executive Scott Duxbury said: "The talks so far have been very positive. We are meeting with Dean and his representatives in the early part of next week with the aim of concluding a new long-term contract."