Note, the 60974 requires an mSD3/mLD3 decoder with firmware 3.2.0.1 or later. ref the 60974 manual.

What decoder is installed in your 37020? (mine has an older 1st gen mSD.)

Extending the wires should probably work (but no guarantees.) I'm i bit surprised there is no space available in the tender for the 60974? But then it's some time since I last opened the 37020 tender, so I might remember wrong.

Note, got thinking(doesn't happen often) and thought that even if it's not officially supported, you might perhaps get some buffering on an old msd with the 60974?, but if it works the only with default settings and no way of controlling it.
I don't currently have a spare 60974, so I can't test it. If it works, it will be just like a standard, simple solution. This is because the susi pin 1 and 4 are wired directly to the MTC pin 20 and 16. I'm just thinking out loud, so if you try it's at your own risk. perhaps call marklin first

A simple solution should work fine. like a standard capacitor eg 35v 1200 to 2400 uf, and a resistor (100 ohm) and a diode (1a). (Some use 25v)
Use as large a capacity capacitor as you can comfortably fit. Some also use a Schottky diode.
Use MTC pin 16 Ub+ and pin 20 decoder GND (purple). Alternatively, you can also use the SUSI socket, pin 4 Ub+ and 1 GND. (they are connected to pin 16 and 20)
There are more posts on the forum on how to make one and some variations etc.
I used this diagram


eg here are two different examples from a steamer and a RC3. (Most of my locomotives don't have capacitors; I just fit them when I do other work and if there is space available.)

Longer, "thin" capacitor, approx 1600uf if I remember correctly. it was unused solder pads on the pcb. (the extra wires are to a relay and a power conducting coupler)


And a short "fat" one, but only 1200uf (a little on the lower side). And here I'm using the Susi plug, I got extra plugs from eBay. (just removed the wires from pin 2 and 3 on the plug).