The 47-year-old guided the Blues to the Premier League title with a record number of wins in his maiden campaign at the club, while also reaching the final of the FA Cup in May.
Much uncertainty has surrounded the former Juventus chief's future in recent weeks, however, as the Italian had reportedly grown frustrated after missing out on a number of his transfer targets, coupled with being homesick following time away from his family.
Conte has not extended his terms in West London, as he also had two years to run on the deal penned 12 months ago, but his annual salary has been increased.
After putting pen to paper, he told the club's official website: "I am very happy to have signed a new contract with Chelsea. We worked extremely hard in our first year to achieve something amazing, which I am very proud of. Now we must work even harder to stay at the top.
"The Chelsea fans have given me so much support since I arrived here one year ago and it is important we continue to succeed together."
Conte, who has had better luck in the transfer market over the past week with the arrivals of Antonio Rudiger and Tiemoue Bakayoko, was said to have been offered a mega deal to join Inter Milan earlier this year prior to their appointment of Luciano Spalletti.
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