He reiterated he was enjoying rugby union, was keen to settle his future within the next month and intends talking to NSW coach Michael Cheika later this week.
NSW Rugby Union chief executive Jason Allen said Cheika and himself had been negotiating with Folau's management for some time and was optimistic the player would re-sign.
"We're extremely hopeful and we're hoping that we can bring this to a close as soon as possible," Allen told AAP.
Folau admits there's no shortage of suitors trying to tempt him back to the 13-a-side code.
"There's a lot of league clubs showing interest and obviously contacting my manager," Folau said.
"At the moment my job is to focus on what's going on with the Waratahs and my manager feeds that info to me but I'm not really worried about that at the moment."
The next Rugby World Cup is just two years away and rugby's showpiece could tempt him to stay in the code.
"That's something that's really exciting, if I get to be a part of it," Folau said.
Although used almost exclusively as a fullback by Cheika, Folau believes he could play on the wing at Test level.
"I'd be comfortable with playing on the wing," Folau said.
Cheika said he was very happy with the way Folau was playing and that his positional play in particular had really improved in recent weeks.
Reds and recent Wallabies captain James Horwill said Folau was a very talented athlete and had the ability to start against the Lions, but stressed the union rookie faced plenty of competition.
"We're very lucky that at the moment there's a lot of outside backs that are playing some good rugby," Horwill said.
"I'm lucky I'm not a selector and don't have to make those decisions.
"It's going to be a tough choice, whoever they go to."
- AAP
