The Frenchman has put pen to paper on a new contract with the Spanish giant which expires in 2019, after spending the last five years with the club.
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The Frenchman has been at the Liga outfit since 2009, when he moved to the Santiago Bernabeu from Olympique Lyonnais for a fee of around 35 million euro.
His current agreement with the European champion was due to expire next summer, leading to speculation about his future, but Madrid has confirmed he has put pen to paper on a new deal.
"Real Madrid announce the extension of the contract between the player Karim Benzema and the club until June 30, 2019, the next five seasons," he club statement read.
During its European Cup winning campaign last term, the 26-year-old scored five goals in 11 appearances, in addition to 17 in La Liga.