Scarlett, 19, is also poised to extend his contract with Spurs.
The teenage striker, who spent last season on loan at League One Portsmouth, has impressed new Spurs head coach Ange Postecoglou, and played the second half of Tuesday's Carabao Cup second-round defeat at Fulham.
Afterwards Postecoglou insisted that Scarlett was part of his long-term plans but did not rule out a loan deal for the England youth international.
"I thought he was bright when he came on," Postecoglou said of Scarlett at Craven Cottage.
"He has been really good for us in training, he's working really hard.
"I'll sit down with Dane over the next couple of days and sort of chart a way forward for him.
"I really think he's definitely got a future at our club and I really like his attributes as a striker. It's always a balance with young players, will they get enough game time because the next stage of their development is to play.
"He played a fair few games last year and I think he's improved as a player since then. I'll make that decision over the next couple of days and sit down with him, but I certainly see him as a Tottenham player and a lot of that will depend on what else happens over the next two or three days."