The Chelsea star is also being tracked by Bayer Leverkusen, who are rumoured to be trying to whet Chelsea's appetite by offering Brazilian defender Lucio as part of any deal when the transfer window re-opens in January.
However, Blues manager Bruce insists that he already has an agreement with the West Londoners about extending the Finnish international's stay at St Andrews, beyond the 22-year-old's present deal which expires over the festive period.
Bruce said: "We have him on loan from Chelsea until Christmas and there is an agreement that he will stay until the end of the season."
It is thought that Bruce is keen to make the Nordic forward's stay in Birmingham permanent in the summer after impressing with three strikes already this season, providing the club retain their Premiership status.
City may have to step up their efforts in the New Year though, if Chelsea are willing to do business with Leverkusen, given that Forssell's chances of breaking into The Blues' frontline appear to diminish with every new major signing. Yet Claudio Ranieri remains a firm admirer of his 'Little Lion'.
Meanwhile, Bruce says that versatile Darren Carter has still yet to ink a new deal with the club.
"Darren Carter has still not signed a new contract. It seems to be going on and on," admitted Bruce.
"We hope that we're a little bit closer. It's pretty obvious he hasn't signed."
