The new deal will keep the Spanish internatinal at Anfield until 2011 and he is the fourth Red to sign a new deal after Steven Gerrard, Jamie Carragher and Pepe Reina.
Alonso said: “I knew there was interest from other clubs but it was always my idea to stay here. It’s a special club and I just didn’t want to leave.
“It’s also good news to see that other players have signed new contracts this week.
“Stevie, Carra and Pepe are all big players for us and it’s great they have all shown their commitment.
“I’m sure the manager will be bringing in new players as well and that the new owners will be making a big effort to improve the squad.
“We can achieve big things and hopefully we won’t make the same mistakes newxt season as we did last season. We want to be challenging the top teams.”
