The England international, 18, was tipped to leave Stamford Bridge and even handed in a transfer request in January after the club rejected a £35million bid from Bayern Munich.
However, he’s now set to sign a new contract with his boyhood club before the start of the season.
It is understood Hudson-Odoi is encouraged by positive words from new Blues boss Frank Lampard, who made it clear he wanted the player to stay.
The teenager is currently recovering from an Achilles injury suffered in April but could return to action as early as September.
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Playing time is thought to have been the key issue for Hudson-Odoi throughout the negotiations.
He made 24 appearances for Chelsea last season under Maurizio Sarri, scoring five goals.