The left-back was sent out on loan by Everton last summer, but headed to the Championship with Cardiff City, where he impressed.
The Bluebirds were keen to keep hold of Nkounkou, however the defender wanted to head back to his native France when Saint-Etienne came calling.
Saint-Etienne were in major trouble when the Everton star arrived, but have climbed out of relegation danger in Ligue 2 with the third best record in the league taken over the last 12 games.
The French side now want to keep hold of Nkounkou and, according to French journalist Ignazio Genuardi, they have kicked off concrete talks to do so.
Saint-Etienne are aware that there is competition for the left-back, but will attempt to sign him on a permanent basis.
Everton are currently scrapping for their lives in the Premier League and it is unclear if they have thought about Nkounkou’s future.
The 22-year-old, often deployed in left midfield in France, has made 15 appearances in Ligue 2 for Saint-Etienne so far this season, scoring six times and providing seven assists.
