Abdalraouf Abdallah was jailed for nine-and-a-half years in 2016 for helping people travel to Syria to join Islamic State jihadists.
He was a childhood friend of Abedi in Manchester and the pair stayed in touch. Last year a public inquiry into the 2017 Arena bombing - in which 22 people were murdered - found Abdallah had a "significant relationship" with Abedi and played an "important role in radicalising" him.
Rochdale-born Abdallah, now 30, went before a private hearing of the Parole Board on Wednesday and could be back on the streets a few weeks later.
The hearing verdict normally takes 14 days.
But even if the board decides he is still too dangerous to be released, the Ministry of Justice will have to free him anyway in November when his sentence expires.
The danger of releasing convicted terrorists was highlighted by the conviction of hate preacher Anjem Choudary, 57, last week for directing a terrorist organisation.
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