The Spaniard has a year left on his current deal at the club, but has said that talks so far are 'tricky'.
He has guided the 'Magpies' to Premier League safety on a small budget this season, which has seen him nominated for Manager of the Season, but if talks break down then he could leave St James' Park.
When asked what Newcastle needed to do he said: "To do the right things, as I have said many times before.
"That means to clarify our ambitions going forward. I have to say what I have to say, and that is very clear. Everybody, and all the fans, they have the same feeling as me. So it is something we need to clarify."
He went on to reveal that he would like to get the club competing for titles and trophies.
"I've had three challenges since I came here. We tried to keep the team in the Premier League, we couldn't do it," Rafa said.
"The second one was to go up in the first attempt in the Championship, and we did it, and the third to stay up, and we did it. I'm quite happy overall with the challenges, but still I'd like to compete for something."