The deal has seen the 24-year-old midfielder commit his future to the Saints until 2018.
"I'm absolutely delighted," Lallana told the club's official website. "To commit my future to the club for the next five years is something I'm really happy about.
"I can't wait to work with the new management team and the lads to continue our progress in the Premier League. It was an easy decision for me with the direction the club is going in."
Lallana joined Southampton as a 12-year-old before graduating from their youth academy in 2006.