The 19-year-old has returned to the London club after spending last season on loan at Borussia Monchengladbach.
Pellegrini initially wanted to keep the youngster but the Hammers boss is now looking to secure for Oxford another temporary switch.
With that in mind, Celtic should move quickly and try to secure a loan move for him before the end of this month.
Signing a defender is a priority for Brendan Rodgers, and Oxford could be a smart signing for the club.