The 22-year-old has been an important player for the Catalan giants during the 2021-22 campaign, making 22 appearances in all competitions, including 15 outings in La Liga.
Xavi has branded the Uruguay international "an extraordinary defender", with the Catalan club's head coach desperate for a new deal to be agreed as soon as possible.
"[Araujo's] renewal is a priority," Xavi told reporters. "For me, he is a very important piece. He is an extraordinary defender and has a winning character.
"They have to reach an agreement quickly, because he is a player for the present and for the future. It is appreciated to have players like him. Ronald is a guy who contributes a lot."