The Welshman, who made his United debut in March 1991, has made a club record 931 appearances, scoring 168 goals.
With his international appearances for Wales and Britain in the Olympics added, his tally is 999 and he could reach the 1,000-game milestone in United's Premier League game against Norwich City on Saturday.
"I am feeling good, enjoying my football more than ever and, most importantly, I feel I am making a contribution to the team," Giggs, who scored in last weekend's 2-0 win over Queens Park Rangers, said on the club's website.
"This is an exciting team to be part of, with great team spirit, and we are again pushing for trophies as we head towards the business end of the season."
The former Wales international, who will turn 40 in November, has won 12 Premier League titles, four FA Cups, three League Cups and two Champions League titles.
He looks set to add to that tally this season as United are 12 points clear at the top of the Premier League, while also still in the FA Cup and Champions League.
He is the only player to score in every season since the Premier League replaced the old English first division in 1992 having also been on target in the two seasons beforehand.
"What can I say about Ryan that hasn't already been said? He is a marvellous player and an exceptional human being," manager Sir Alex Ferguson said in a statement.
"Ryan is an example to us all, the way in which he has, and continues to, look after himself."
Giggs has in the past said that practising yoga has kept him in the game so long, while Ferguson added that his enjoyment was also a key part.
"He has fantastic energy for the game and it is wonderful to see," the manager said.
"Ryan seems to reach a new milestone every week and to think that he now has 23 unbroken years of league goals behind him is truly amazing in the modern-day game.
"His form this year shows his ability and his enjoyment of the game are as strong as ever and I am absolutely delighted that he has signed a new contract."
FIFA President Sepp Blatter, speaking before an International Football Association Board (IFAB) meeting in Edinburgh, also lauded Giggs.
"I think it is amazing. It is exceptional. I can only say congratulations, you are great Ryan, you are really great. I can only bow and say compliments," he told reporters.
"It's not so important to play always in the World Cup. I think now when he had the opportunity to smell the Olympics football tournament, I think it's like a small World Cup. It's great for him to have done it."
Playing for Wales has meant Giggs has not featured in high-profile international matches as much as he might have done but while many England fans may have rued he was Welsh rather than English, the player himself has always been proud of his team.
Football Association of Wales president Trefor Lloyd Hughes is hoping Giggs, who has been doing his coaching qualifications, might one day use them
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