When you click on the icon, there is a drop-down list of available news readers. Right now, only a couple are listed, after the announced death of Google Reader. You can, however, add a new one. To do this, you'll simply need the URL that is used to add feeds to the reader. Chrome inserts the RSS feed URL via a variable replacement (%s). If you don't see this list, you may have selected a default reader, and can access the list via the Options for this extension.
The URL you need is:
Just paste it in when you click 'Add', and name the reader whatever (e.g. feedly). From that point forward, you have easy access to RSS feeds.