The Ghana international joined Chelsea from French side Lyon in August 2005 for £24 million.
Essien said: “It didn’t take me long to decide to sign.
“I am really happy because I came here to stay a long time. I work really hard and do everything to succeed. I have the ambition to win a lot of trophies.”
Chelsea chief executive Peter Kenyon said after Essien signed his new deal: “We are delighted to have him.
“We spent a summer getting him, it wasn’t easy, and it is nice to be on the next step.
“He is recognised as one of the new gems to have joined the Premiership. He enjoys London and is settled.”