The 25-year-old featured 41 times under Roberto Martinez last season, earning a place in the PFA Team of the Year in the process, and ends speculation linking him with Arsenal
|13/2||Everton are 13/2 with bet365 to finish in the top four next season|
Coleman's effectiveness both in defence and attack - scoring seven goals last term - has reportedly attracted interest from Arsenal, who are looking for a replacement for Bacary Sagna.
But the Republic of Ireland international is excited by Everton's prospects under Martinez and was keen to commit to new terms.
"With how much I love playing at Everton, I was delighted to get the chance to sign another contract," Coleman told the club's official website.
"I've been at Everton five years now and I love everything around the place. I love working with all the players, the staff, the coaching staff - everything. It was a very happy decision to make.
"With the manager and some of the players we have, we're going to the right places."