2010 is the last year of his current contract. Barring a catastrophe, Derek Jeter will surpass 3000 hits sometime in 2011.
Jeter will be 37 in 2011. Only five 37+ shortstops in history have ever had an above average offensive season, and only two have done it more than once (Honus Wagner and Luke Appling).
The question really comes down to how much the Yankees think Jeter will maintain his abilities as he enters his late-30's.
I'm usually of the mind to let players finish out their contract before re-signing them. If the Yanks re-signed Jeter now, if would be off a phenomenal year where he would command top dollar. If 2010 is a 'lesser' season, it'll cost less to bring him back.
What could be a fairly big reason to extend him now (meaning this off-season) would be to avoid the potential year-long distraction of the MSM talking about it every other day (and obviously the possibility, however slight it may be, that Jeter signs elsewhere).
A lot also depends on how many years Jeter wants. I'm sure the Yanks don't want to go more than 2-3. What if Jeter wants a five-year extension? I'm all for sentimentality, but not if it hinders the overall team.
Another factor is the advancement of shortstops within the farm system. Frankly, there aren't many. Carmen Angelini and Jose Pirela are the only high-ceiling shortstops in the system (and that's not saying much). Sure, Ramiro Pena could play great D, but he won't hit anywhere near Jeter.
Could a trade or FA acquisition happen? Could Hanley Ramirez be acquired?
What's the solution?