The new terms mean that the 25-year-old Uruguayan is now tied to the club until 2016.
It was speculated that the Stamford Bridge side were close to signing Pereira over the summer, but they were unwilling to pay the €30m (£25.7m) fee that Porto asked for.
"A lot was said in the summer and we should leave talks to Porto now," Flavio Perchman told Maisfutebol.
"Alvaro Pereira is motivated, he already had a good contract with Porto and now he only thinks about doing a good season."
Pereira joined the Portuguese club from Romanian outfit CFR Cluj in 2009.