"He's happy, training well, he's improving, he's focused," Benitez told reporters on Thursday. "You can't stop speculation about players, but I was talking with him for a while last week and the focus is just trying to improve his game.
"I think at the moment he knows he has to continue progressing and learning, but he is quite happy here."
Lascelles joined Newcastle in 2014 but has flourished during Benitez's reign. The 24-year-old was instrumental to the Magpies' promotion-winning campaign last season.
Newcastle's current three-game winning streak has helped them climb to 10th in the league.
(Reporting by Aditi Prakash in Bengaluru)
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