The 22-year-old had been linked with the Camp Nou club following a stellar 2013-14 season in which he helped the Rojiblancos lift La Liga and reach the Champions League final.
Striker Diego Costa and left-back Filipe Luis both left Atletico this summer for Chelsea, but Koke decided against joining Lionel Messi and Co. despite their intense interest due to his desire to continue to impress under Diego Simeone.
"The truth is that part of me said it was difficult to say no to Barca but I wanted to continue at home for many years at Atletico," he told AS.
"It wasn’t time to leave. This is my home, where I feel wanted and the club didn’t need to sell. How was I going to leave at the best time for Atletico?
"It’s not easy to say no to Barca and their interest was appreciated. It means the work I’ve done has paid off. But I’m at home here.
"I’m just another player at Atletico, a player who gives everything for his team and does what Simeone asks. I’m not the best or the flagship, the banner. The most important thing to me is to make a better Atletico and be a team player, which is ultimately what matters.
"The new signings are great players, they’re all important and I believe they will all contribute a lot to the team. They hope to do things right and that is something Simeone values highly."