Competition for wide positions will be fierce due to the arrival of Ashley Young, but Valencia insists that he is “happy” to remain with the Premier League champions.
"I am delighted to stay at United,” Valencia told the club’s official website. “Since my first day at Carrington, I have been happy here. I hope that I can continue to develop as a player.
"I am looking forward to making my contribution to helping this squad compete for more trophies."
The Ecuador international, who joined the Red Devils in 2009 from Wigan, has racked up 69 appearances and 10 goals for the North West club.
Valencia suffered an ankle injury last season, which kept him sidelined for five months. United boss Alex Ferguson has admitted he’s delighted that the winger has signed a new deal.
"Antonio has made a fantastic contribution since his arrival. His speed, crossing ability and versatility have been a big asset for us," Ferguson added.
"He has a quiet, unassuming way of going about his business, which is underlined by great strength of character - as his recovery from such a bad injury last season proves."
Valencia is expected to stay at Old Trafford until 2015.