Gerrard, 28, has followed manager Rafa Benitez in pledging his long-term future to the club, who could return to the top of the Premier League this weekend as they chase their first title for 19 years.
"This is fantastic news for the club," Benitez was quoted as saying on the club's website.
"Steven has once again shown his commitment and it was an easy deal to agree. As soon as we offered him the option he said 'yes'.
"There were no problems at all. He wants to stay for life. This deal sends out another clear message that we are moving forward as a club."
Benitez added: To know we have a player of Steven's quality with us for many more years is a great boost for the club and the fans.
"He is clearly a player who inspires those around him and even though he is playing very well at the moment, I still think his best years are ahead of him."
LIVERPOOL FANS! Check FourFourTwo.com’s ever-expandinginterviews archivefor more stuff to read:
Web Exclusives Ian Rush, Craig Johnston
Q&A Steven Gerrard, Fernando Torres
One on One Michael Owen, Nicolas Anelka, Kevin Keegan
Boy's A Bit Special Danny Guthrie
Ask A Silly Question John Barnes, Peter Crouch, Luis Garcia, John Aldridge
Perfect XI Jamie Carragher
What Happened Next? Julian Dicks
And Another Thing Being a Big Four fan
