The new deal will keep the 24-year-old at the club until at least 2017, meaning that Schneiderlin will have been at Southampton for almost a decade having joined in 2008.
"I am a very happy man," Schneiderlin told Saints Player. "To commit my future to Southampton is a big thing because this club has big ambitions - and I have big ambitions as well.
"I wouldn't have signed this contract if the club didn't have a big project. When I spoke to the chairman and the manager, I knew they wanted to do something very good at this club and I want to be a part of that.
"My main focus now is to do a great job on the pitch so we achieve all of the ambitions that we have."
Southampton manager Mauricio Pochettino was similarly delighted at having wrapped up the deal, describing the Frenchman as one of the most complete midfielders in the league.
"I am delighted that the club has been able to extend Morgan's contract," Pochettino said.
"During my short time with Southampton, Morgan has shown what a capable player he is and has demonstrated his potential to become one of the Premier League's most complete midfielders. His work-rate and determination make him an integral part of how we play, and so I am pleased he has been rewarded with a new long-term deal.
"Morgan has played a major part in the journey this club has been on over the past four years, and I am sure he will continue to develop as a player as we move towards our long-term ambitions."
Schneiderlin has appeared in all but one of Southampton's league matches so far this season.