The 25-year-old has been a hit at Old Trafford since joining the club from Wigan two years ago.
“I am delighted to stay at United,” Valencia told the club’s official website.
“Since my first day at Carrington, I have been happy here. I hope that I can continue to develop as a player.
“I am looking forward to making my contribution to helping this squad compete for more trophies.”
United boss Sir Alex Ferguson added: “Antonio has made a fantastic contribution since his arrival. His speed, crossing ability and versatility have been a big asset for us.
“He has a quiet, unassuming way of going about his business, which is underlined by great strength of character as his recovery from such a bad injury last season proves.”
