The veteran midfielder has rebuilt his career with the Yellow Submarine after being cut loose by Arsenal last summer.
After captaining Spain last week, Cazorla has received a further boost with a new contract offer.
The new deal is worth a base of €500,000 for the coming season.
Villarreal president Fernando Roig stated: "Since Cazorla has returned he has proven a vital player and outstanding person.
"He has proved a great addition for the club and the team."