Arsenal's options up front are limited after Pierre-Emerick Aubameyang's move to Barcelona in January, leaving Lacazette as their only senior player in that position.
"We have discussed that (Lacazette's contract) and we've been open that at the end of the season, once we know where we are, we are going to make a decision together," Arteta told reporters.
"The decision, we agreed, is to do it in the summer and we are going to do it as soon as the season is finished."
Lacazette has netted only three times in 20 league appearances this season but he has provided seven assists.
"I think he's been very close (to scoring) and that's why we have to keep pushing him and giving him support that he plays with that confidence and hopefully on Sunday he can do it," Arteta added.
Arsenal, fourth in the standings with three games in hand, ground out a 3-2 away win at Watford last weekend and are looking to extend their winning streak to five games when they take on Leicester City.
Arsenal's bigger goal - a top-four finish and Champions League football next season - is also within their grasp, particularly as they have games in hand over the teams around them near the top of the table.
"To be with the top teams you have to win consistently and you have to do it in a convincing way," Arteta said.
"I think you need even more than those amount of victories because there are teams in this league that can do that for 10, 11, 12 or even 18 times. So the margin is still pretty big."
Right back Takehiro Tomiyasu remains sidelined with a calf injury but Arteta said Emile Smith Rowe could make a return after he recovered from COVID-19.
Smith Rowe, the club's top scorer with nine league goals, last featured in the 2-1 win over Brentford on Feb. 19, where he scored the opening goal.
