The 28-year-old has established himself as a pivotal player for Pep Guardiola and has been regular over the last two seasons.
The Portuguese full-back has bagged two goals and five assists from 14 games already this campaign.
Arsenal legend Kevin Campbell claims Real Madrid could make a move the Man City defender within the next two summers.
Campbell he told Football Insider: “I think (he) would. I suspect Cancelo might consider leaving in the next two years, especially if they get the Champions League.
“This Man City project needs a Champions League on the sideboard and the players recognise that I’m sure. If they do it, players like Cancelo might think, ‘I’ve won everything at Man City. It’s time for a fresh challenge.’
“For Real Madrid, it would be great to get him. He would be perfect for them. Can they get him? I think it’s possible. A lot will rely on whether City can win the Champions League in my opinion.
See More: Top Five highest-paid Manchester City players