Yes, but we are not allowed to formally, legally sign him up on a contract for next season until one month before his current contract expires. We can informally negotiate and agree terms, but we can't get it in writing until May (unless we agree a fee, and pay it to Chelsea to sign him immediately).
Not necessarily saying this is a bad thing - if he's good, we'll keep him. If he's rubbish, we'll not. The only risk is if he's stupendously great, enough to attract Championship clubs to come sniffing.....