The 25-year-old’s future at Anfield had been cast into doubt this summer, with Serie A champions Juventus interested in bringing the Uruguay international to Turin.
However, Suárez insisted he feels settled on Merseyside, describing the chance to play for the 18-time English champions as a “dream” after joining from Ajax in 2011.
“To sign a new contract with Liverpool is unbelievable for me because I am so happy here at both the club and also in the city,” said Suárez.
“That is important for me and I am very happy with my new contract.
“When you are a kid, everybody wants to play for Liverpool. I am here now and it is a dream for me, and now I am a Liverpool fan.
“I am happy off the pitch because the people of Liverpool are good with me and my family. I try my best on the pitch and when you are happy off the pitch, you are happy on the pitch.
“I want to say thank-you to the fans because they are our 12th player. The supporters of Liverpool are unbelievable.
“Five or six years ago I watched on TV the stadium and the club, and now I play here and the supporters have helped me. That’s very important for me.”
Manager Brendan Rodgers, who replaced Kenny Dalglish as Liverpool manager in May, was delighted to see Suárez commit his future to the Reds.
“I’m delighted. When you have the opportunity to work with world-class players it’s fantastic,” added Rodgers.
“There were certainly a few clubs who were interested in him but over the off-season he and I communicated well – and he’s committed himself for the long term here now.
“He’s really looking forward to playing in this way of working. As a manager and for the supporters, I’m delighted because I know how important he is for them.”
Suárez, who joined Liverpool in a £22.75m deal from Ajax in January 2011, scored 11 league goals in 31 appearances last season.
The length of his new contract has not been disclosed but the forward had four years left on the five-and-a-half-year deal he signed when he moved to Merseyside in January 2011 before Tuesday’s announcement.
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