The 28-year-old, who is widely regarded as one of the best centre-backs in European football, helped Atletico claim the domestic title and reach the final of the Champions League last season.
A number of clubs have been linked with a move this summer, but the Uruguayan has quelled talk that he could leave the Spanish capital.
"Next season I'll be staying in Madrid, I'm really happy there and I have a contract. I've still got four years ahead of me there," he told reporters at a press conference.
"There's always suitors, even more so when things are going so well at the club. It's normal that there's talk in the press about our players.
"All this does is give me a sense of pride, but I have a contract and I'm happy."
Godin is currently on World Cup duty with his country.