Eagles had looked set to move to SPL champions Rangers in the summer however the former Manchester United winger is set to stay at Turf Moor for another two years.
“I wouldn’t have signed if I didn’t think Burnley can get back into the Premier League,” he told the club’s official website.
“I love it here and the players we have got have got the talent to go back there.
“I have been here for two years and had a brilliant time – and with the squad we’ve got here I believe we can do it again.”