The 31-year-old England midfielder has made 394 appearances in a decade with the club and had two years remaining on his existing deal.
He told Liverpoolfc.com after inking the terms: “I'm obviously very honoured and proud to continue the journey I've already been on here.
“It's amazing to finally get it done and just concentrate on looking forward and what the future may hold.
“I'm in a different place of course, as a player and as a person, from when I first walked in. I've learned and grown a lot over my time here, and I've got to thank a lot of people for that.
“I've loved every minute of it, even when I look back at the tough times, I was still enjoying being a part of this football club. The longer I can do that, the better for me really. I want to be here as long as possible, I've always said that.
“To continue this journey is incredible for me and my family, and I hope the fans and the club feel the same way."
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