Liverpool have been linked with the Argentinian winger for a while and Benitez has now publicly confirmed the Reds are in talks with Atletico Madrid over a transfer.
"It's true we've talked to Atletico Madrid and we're interested in the player but still it's just conversations," said the boss.
"You never know with timescales. It's a question of everything being more or less agreed, and now it's for Atletico and the player to talk and see what happens."