While the player has not had much opportunity under Simeone, it is thought that the manager would want to keep him to give him options as he targets La Liga and Champions League success in the second half of the season.
Atleti are seven points clear at the top of the Spanish top flight and face Chelsea in the Champions League round of 16 next month.
Torreira proved an instant hit with Arsenal supporters following his arrival at the club in 2018.
He was a regular under Unai Emery, who personally backed the signing following an impressive showing at the 2018 World Cup in Russia.
But his involvement last season was limited, and he was deemed surplus to requirements by manager Mikel Arteta in the summer.