The 30-year-old’s current deal is due to expire at the end of the season, although The Athletic reported last week that he will likely extend his stay at St James’s Park.
There is yet to be an official announcement from the Magpies after the former Crystal Palace striker was recalled to Steve Bruce’s starting XI for the 2-2 draw with Tottenham Hotspur on Sunday.
His appearance from the start against Spurs was Gayle’s third of the campaign – which is one of the reasons why Lee queried the reasons for him apparently staying.
And Lee, who spent 10 years as a player at Newcastle, also believes the club’s younger players will be left wondering how he has been handed a new contract.
He told Football FanCast: “I’d say it’s confusing from a player’s point of view because you’d look at it and think over the last 18 months he hasn’t played much, and when he has the goals haven’t been there and he’s rewarded with a three-year contract.
“If I was a player coming through I’d be questioning what has he done to earn that contract? I don’t know why they are signing him now because we’re in a relegation battle, and I don’t get why you would be signing players up unless they are planning to play in the Championship next season?”
Opta predicts Newcastle United to achieve Premier League safety
Football analysts Opta are backing Newcastle United to retain their Premier League status.
Latest insight from 'The Analysis', Opta's rolling football blog, has calculated where each of the 20 teams in the Premier League are most likely to finish.
And it provides encouraging news for the Magpies, who are tipped to end the season in 17th on 37 points – five more than Fulham.
The likelihood of United finishing fourth bottom is calculated at a 49.3% chance, while there is a 10.7%. chance they’ll finish in the relegation zone.
Meanwhile, the Cottagers are ranked at a 75.4% chance of getting relegated and an 11.3% chance of pipping Steve Bruce’s side to safety.