Kevin Keegan has encouraged Newcastle United to enter contract negotiations with Michael Owen as a matter of urgency, with the manager adamant that the England forward can develop into “one of the greats” at St James’ Park. Owen’s present deal expires at the end of next season, when the striker would be entitled to leave Tyneside on a free transfer.

“I’ve already started to say to the club that we should be talking to Michael now; not next week, not next month, but now,” Keegan said after Saturday’s 2-0 victory over Fulham – his first since replacing Sam Allardyce – in which Owen scored. The 28-year-old has mustered four goals in his past seven games for Newcastle, emerging as an increasingly influential figure.

Supporters have not always found it easy to adore their record signing since his £16 million arrival from Real Madrid in 2005, but suspicions about his loyalty and frustration with his injuries have dimmed in recent weeks. Appointed captain by Keegan, the striker, who earns £115,000 a week, has demonstrated his commitment with fine, gritty performances against Birmingham City and Fulham.

“Whatever finances are here, I don’t think we could go out and get a player that’s any better than Owen,” Keegan said. “That’s the reason I think we should keep him and, as long as he doesn’t get injured again, Newcastle fans will see a player who’ll grow into one of the greats here.

“I don’t see why we should be looking all over the world for foreign players and trying to teach them how to play in the Premier League when we’ve got one who knows his way around and whose goalscoring record is tremendous. So I’ll do everything I can to keep him, but at the end of the day, it’ll be Michael’s decision.

“The time to talk with him is now and that’s what I’ll be urging the chairman [Chris Mort] and Lee Charnley [the football secretary] to do. There hasn’t been a reaction yet because I only mentioned it last week, but I could see this coming. Michael’s not going to stop scoring goals, he’s not going to stop catching the eye and he is going to be wanted by other clubs.”

Sven-Göran Eriksson, the Manchester City manager, is a long-time admirer of Owen, who has scored 13 league goals in 30 starts for Newcastle. “Michael is vitally important to the club at the moment and, hopefully, for the future, too,” Keegan said. “He’s a great player. He has been both a general and a soldier for us since I’ve been here and you’re seeing him now absolutely at his peak after his injury. He contributes both on and off the field. In a quiet, reserved way, he’s a major influence around the club.”