The 25-year-old joined the west London outfit as a teenager in 2006 for a fee of £16 million, with the club having to pay Manchester United £12m after they had an agreement to sign the midfielder first.
Since then, the Nigerian has gone on to make 261 appearances for the Blues, starting in 213, but has only netted twice.
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The defensive midfielder labelled Stamford Bridge as his "home", while insisting that he is just hitting his "peak" as he aims to secure more silverware with the club in the coming years.
"Chelsea seems like my home now because I have been here for over six years and I enjoy my time here," he told the club's official website.
"I come into the training ground every day to work and I value my time there. I am happy and want to keep going and win trophies for this club.
"I have basically won everything with Chelsea and those years have been really special for me, winning trophies with big names like Didier Drogba, John Terry and Frank Lampard who have had very long Chelsea careers.
"Last season to win the Champions League was even more special and I hope these next five years will bring even more success and I can win trophies with the new players we have here.
"Being 25 I think I am now hitting my peak but as a player you want to improve every day and there is still room for that. I want to learn from the players and the manager and I just want to keep going."