Next-gen would be great (a vastly more capable hardware, better online structure, etc.), since we can definitely rule out a sequel this generation by now. Would be great to see another one before Tourist Trophy's 10th Anniversary, but I'm not giving my hopes up for that.
On the other hand, Takamasa Shichisawa, the director of and the guy who made Tourist Trophy possible, is apparently back at Polyphony. Although he's currently part of the Gran Turismo Explore Studio, hopefully he'll pitch the idea of a sequel to Kaz (himself claiming that he'd love to make another one) at some point.