The 54-year-old German took charge of Liverpool in 2015, and since then has steered the Reds to the club’s sixth Champions League title in 2019 and first league title in 30 years in 2020.
Klopp’s previous contract as manager had been due to end in 2024. Liverpool has not announced when the new deal is set to expire.
“There is just so much to love about this place,” Klopp said in a statement on the club website. “I knew that before I came here, I got to know it even better after I arrived and now I know it more than ever before.
“Like any healthy relationship, it always has to be a two-way street; you have to be right for each other. The feeling we were absolutely right for each other is what brought me here in the first place and it’s why I’ve extended previously.”
Assistant managers Pepijn Lijnders and Peter Krawietz have also signed new contracts with Liverpool.
Since joining from German side Borussia Dortmund, Klopp has transformed Liverpool into one of the best club football sides in the world.
In the Premier League, the Reds are one point behind Manchester City with five games left to play this season.
“There is a freshness about us as a club still and this energises me,” Klopp added.
“For as long as I have been here, our owners have been unbelievably committed and energetic about this club and it is clear that right now this applies to our future as much as I’ve ever known.”