If discussions are ongoing then that's good. It sounds like his enforced sabbatical has given him a new lease of life. 2 years ago Haskell admitted at this time of year no club, including Wasps, were even in discussions with him.
As always, it comes down to what the club think his value is and what Jimmy thinks his value to the club is.
As we saw with Haskell's in his last season with us, the club saw very little value in re-signning him (which turned out to be a wise decision).
I would think Jimmy has one more good season in him and I don't see why Mills would expect to sign for a new club expecting to be given 1st choice status. He will acecpt he'll have to earn that right.
The pertinent question is whether Jimmy wants a 1 or 2 yr deal (either here or elsewhere) and, of course, whether Wasps are prepared to extend his current contract by one year (meaning he would stay on the same money), or ask him to sign a new contract possibly for 2 yrs but on less money (as there is more risk to Wasps)
The only other player I can think of, at his age, at this level in recent times is Peter Stringer who i think was playing for Bath at Jimmy's age