Niang had a tough first season in Serie A after arriving from Caen, making only nine starts in the league and failing to find the net.
The 18-year-old's only goal for the club came in Milan's 3-0 victory over Reggina in the Coppa Italia in December 2012.
Despite a lack of goals, the striker is determined to stay and contribute at San Siro.
"I feel perfectly fine in Milan and I want to stay," he told L'Equipe. "I know what I can bring the team and I'm not afraid of competition.
"I'll play where the coach asks me. I know I have the capacity to impose myself on this team."
Newcastle manager Alan Pardew is keen to add a striker to his ranks with only Papiss Cisse, Yoan Gouffran and Shola Ameobi available to him.
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