When The Hobbit was first announced, way back before Peter Jackson was even directing, rumor had it that the first film would be just The Hobbit and the second film would span the decades between that story and The Fellowship of the Ring. A bridge movie, we were calling it.
That ended up not being the case, but the concept got lodged in Peter Jackson's mind. Coming out of Comic-Con Meredith reported that Jackson was saying he wanted to do a third film, but it was unclear if that was real or just sort of spitballing.
Turns out it was real, and Jackson is deep in negotiations with Warner Bros to make it happen. The logistics of it would be: two more months of shooting, happening next summer in New Zealand, and all new deals for the actors to come back.
On other movies those deals might be really hard to close - the actors have the studio over a barrel on this one - but the general geniality between everybody involved in these movies makes it seem like most, if not all, of the actors would be happy to come back on reasonable terms.
The third film would probably pull a lot of material from the Appendices at the end of The Lord of the Rings; Warner Bros does not have the rights to JRR Tolkein's other massive Middle-Earth work, The Silmarillion, and Jackson believes they'll never get it. The Appendices are LOADED with material; Jackson could decide to tell a story about the history of Middle-Earth, as much of it is chronicled there. Or he could just keep the film to the years between The Hobbit: There and Back Again and The Fellowship of the Ring. I mean, check out this one entry from the timeline of the history of Middle-Earth:
2957-80 - Aragorn undertakes his great journeys and errantries. As Thorongil he serves in disguise both Thengel of Rohan and Ecthelion II of Gondor.
That's smack dab between the two stories, and it's so vague that it has inspired a ton of fan fiction over the years.
Which, by the way, is what this film would be. If Jackson decides to limit the story to the time between The Hobbit and The Lord of the Rings, he will be indulging in incredibly expensive fanfic. While the broad strokes of those years are covered in the Appendices, detail upon detail would need to be invented.
A six film Lord of the Rings saga? If it works, I'm all for it.