Based on available data, Asensio's contract at Real Madrid will expire at the end of next season, so I think there is still plenty of time for Real Madrid to extend his contract. But I think if Milan really want to get Asensio's signature, then they will have to spend a lot of money to convince Madrid to let him go.
We know he is a very good player at Real Madrid so far, he probably deserves to be contested by many teams at the moment because of his quality. But I would probably agree that Asensio chose the Premier League over Serie A if he wanted to move.
Just my opinion, but i feel its best if Madrid do not offer Ascensio a new contract; there are quite a few of Real Madrid players that their developments have stalled over 2 seasons, Jovic is one, Marianno, even Hazard. Carlo has to make decisions and offload these fringe players to get new players to freshen up the squad and team morale
This would be a good move and indeed it looks like it will happen especially now that Vini has also had his contract extended and now it looks like Asensio is also just waiting for time,
His performance is clearly quite good even though for a few games towards the end Asensio's position is mostly filled by Valverde but I think for next season he will still be very useful especially if you look at the rotation of the midfielders then Valverde will be placed in attacking midfielder.
But indeed this will clearly silence Milan if this is indeed the case because this issue will definitely affect Milan as well