The Belgian has usurped Petr Cech as number-one goalkeeper at Stamford Bridge this season after impressing during three season-long loan spells at Atletico Madrid.
Courtois is delighted to have committed himself to the Blues and is now focused on maintaining his form.
He told the club's official website: "I'm very happy with this new deal, it's really nice to have signed this new contract for five years.
"My future was already sorted but it's nice to know I'm going to be here for another five years and now I can just concentrate on playing games."
The 22-year-old joined the Blues from Genk in 2011, but did not make his debut until this campaign.