Cahill, 30, had two years remaining on his current deal but with other Premier League clubs interested in signing the Australia international, Everton were keen to secure the future of their vice-captain.
The midfielder joined from Millwall in 2004, making 164 League appearances for the Toffees and scoring 45 League goals since his Ã‚Â£1.5 million move to Merseyside.
The 30-year-old is expected to play a crucial role in the forthcoming World Cup for Australia.
Cahill spoke to EvertonTV earlier this month and revealed his desire to remain at the club for the remainder of his career.
“The chairman knows my thoughts, I will sign here for life,” said Cahill.Ã‚Â “He knows my thoughts on what I love about this Club.Ã‚Â I respect everyone so much and hopefully I am here for a long time.”
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