Malouda was expected to be sold this summer but has won over the fans and the hierarchy after a string of impressive performances in the last two months of the season.
The French international, who joined from Lyon for £13.5million in 2007, had struggled for consistency but is now feeling settled at Stamford Bridge. He is likely to face more competition for his place on the left of midfield next season with the arrival of Yuri Zhirkov from CSKA Moscow.
Malouda said: "We will have a meeting at the beginning of June. Both parties want to carry on. It's a wonderful experience but just the beginning. I hope in the next years you will see me win many, many trophies.
"When you play so many high-profile games you get the experience and confidence that comes with it. I hope to share joy and happiness with the fans."
When asked if he is ready to compete with Zhirkov should he arrive, Malouda added: "Of course. It's just the beginning because with Ashley Cole on the left we have confidence so it gives us a lot for the next years."
Malouda has only 12 months of his deal left to run but is expected to get a two-year extension with a pay rise from £50,000 a week to around £65,000 a week.
Alex is also going to be rewarded for a number of impressive displays this season with a three-year deal that will see his salary increase to £60,000 a week. His current contract expires next year but the new agreement will ensure the defender remains at the club until 2013.