The Swede is delighted to have finally settled into a centre-half pairing at the Hawthorns, while suggesting that keeping hold of players all over the pitch has helped the club
The 29-year-old penned the contract, which keeps him with the Baggies until 2016, in early October, after an impressive start to the new Premier League season in which Steve Clarke's men hold the joint-fourth best defensive record.
The Sweden international, who is currently with Eric Hamren's squad ahead of World Cup 2014 Qualifiers with the Faroe Islands and Germany, revealed that his partnership with the Northern Irishman is the best he's had at the Hawthorns, with their off-field friendship a huge help.
"I finally feel I've been able to get a good partnership at centre-half," he told the club's official website. "I very much enjoy playing with Gareth and I hope our relationship can be a long one.
"One of the reasons I have re-signed is that I really love playing with him. He's a good guy as well and that makes it easier to connect on the pitch.
"It's normal when you play next to each other on the field to talk a lot and be friends. I definitely feel a connection with him."
The Baggies have made a very good start to the new campaign, beating the likes of Liverpool and Everton while drawing with Tottenham as they sit in sixth place after seven games.
The Swede believes the team is reaping the benefits from holding onto their core of talent over recent years, adding that he is enjoying his time in England immensely.
"I really feel the club has been managed in the very best way," Olsson continued. "We've been keeping the squad intact over the last few years.
"We've had a chance to really connect as a group. It's a very nice group and I always come into training with a smile on my face.
"I'm really happy to be part of that - and it is vital you are happy in that way. The way the club looks at it is to not only find good footballers but also good characters."