If he's willing to extend for a year or two, give him the salary bump. Seems like a win-win situation to me, because we'd get the player longer than we thought we'd have him for, and he's been everything we had hoped he would be -- he's earned a raise.
If he doesn't extend, let him play out his current deal, or find him a nice home somewhere else (if he prefers to leave).
Hopefully he gets a modest bump, and stays in the mix.