The 24-year-old, who was linked with Norwich City after the end of last season, was reported to have had a £10m price tag placed on him.
However, the Championship club have managed to keep hold of the forward, whose contract will now run until the summer of 2019.
"I'm delighted, I'm very happy," Rhodes told Rovers Player. "It is a fantastic football club and I'm very lucky to be here. I enjoy coming in every day and to have an extension of two more years on top of my current contract is a real bonus.
"I was delighted to sign it, it is a club I enjoy playing for. The fans have been great ever since I've come in the place and I've just thoroughly enjoyed it so I'm delighted to be here."
Rhodes finished last season as top scorer with 25 goals.
Jordan Rhodes has signed a new deal with Blackburn Rovers pic.twitter.com/m7HDCXObQ2— Blackburn Rovers (@OneRovers) July 10, 2014