The Spain international looked likely to return to former side Barcelona last summer after holding talks with president Josep Maria Bartomeu, just a year on from joining the Blues.
Pedro no longer has any thoughts about leaving West London, however, as he has played a big part in helping Chelsea to an eight-point lead at the top of the Premier League - in stark contrast to last season when the fallen champions finished 10th.
"This is the best moment for me at this club and also the best moment for the whole team since I've been here," he is quoted as saying by the London Evening Standard. "I'm very happy here. It's a good situation when you are top of the league and progressing in the FA Cup. We are on the right path.
"Last year was a difficult one for me, for the club, for the team, but this year is different. With this coach, all the team is focused on the fight for the title, with more confidence for every game and this is good.
"It's a completely different season. Every day I'm more comfortable with the team, with my teammates, with the club, and I have a good relationship with the supporters. All is good for me here and I'm very happy with the situation."
Pedro has scored nine goals in all competitions for Chelsea this season, which is already more than he mustered across the entirety of 2015-16.