Goretzka, 26, has been linked with a move away from the Allianz Stadium this summer having entered the final year of his contract.
But new Bayern boss Nagelsmann is confident the midfielder will sign an extension and stay with the Bundesliga giants.
The manager was asked for an update on Goretzka's contract situation after his side suffered a 3-0 defeat to Napoli in a pre-season friendly on Saturday.
"I'm not involved enough that I have a say every day," he told reporters. "I stay out of these issues.
Bayern Munich boss Julian Nagelsmann is confident Leon Goretzka will stay (Image: EPA)
"Of course I have talked to him about my plans for him. I've told him I'd be happy if he extended and I'm also confident. There are several topics involved when it comes to discussing a contract extension.
"I'll continue to focus on the sports side of things and show him he can be one of the most dangerous midfielders in Europe. He has potential to get even better."
Germany international Goretzka is said to want a big pay rise at Bayern with his current contract set to expire next summer.
Bundesliga expert Jan Aage Fjortoft said he and team-mate Joshua Kimmich want to earn similar amounts to the club's highest earners, such as Manuel Neuer, Robert Lewandowski and Thomas Muller.
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And the former Premier League striker said Bayern could end up losing both players, in a repeat of what happened with centre-half David Alaba.
"You have at Bayern, in the structure of the wages, you have Neuer, you have Lewandowski of course, and you have Muller," Fjortoft told ESPN FC last week.
"[David] Alaba said 'I want to earn the same' and they said 'we won't pay you that' and he said 'adios, I'm going to Real Madrid'.
"Now Kimmich's contract is up in 2023, Goretzka's contract is up in 2022."
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Man Utd have reportedly made contact over Leon Goretzka (Image: REUTERS)