The Colombian has entered the final year of his contract and has unsurprisingly been linked with a summer move.
Spanish side Sevilla and Turkish giants Besiktas have reportedly shown an interest, while reports of a bid have been wide of the mark.
A fee of £6million has been quoted which is below the market value, making it important a new contract is agreed.
"Firstly, I would sign him,” Miller told Go Radio. “That would be number one.
"If you sell him afterwards, you are in a better position to get more money.
"With a year left, you are not going to get the market value that a player who has scored the amount of goals, and put in the level of performance that he has, deserves."
He added: “I don't think they will be happy with that (a £6million fee), but that is probably the maximum they are going to get.
"If he can score the goals that get Rangers to the Champions League, then absolutely keep him, but there is no guarantee of that.
"I firmly believe that Alfredo holds all the cards. I believe he loves it here in Glasgow and scoring in front of that Ibrox crowd.
"I don't think staying for another year would be a big drama for him. He is going to be playing, and anybody who comes in has to take the shirt off his back."