The deal means the Frenchman will stay with the north London club until the end of the 2013/14 season.
"My heart belongs to Arsenal and my desire is to see this team win silverware," Wenger told Arsenal's website on Saturday.
"My commitment and drive are as strong and fresh as ever.
"I feel my personal position is that I am as motivated as ever, if not more. I have the trust from my board and hopefully of the fans as well and also from the players," added the 60-year-old Frenchman, who is about to embark on his 15th campaign in charge.
Wenger, Arsenal's longest serving manager, has won three Premier League titles and led the club through an undefeated league season but is under pressure from some fans after five trophyless campaigns.
"I feel that we have not won for a few years now and it is important to get back to winning trophies because we have gone for a certain policy.
"We maintained the club at the top level but we want to get to the next step, to win trophies and to win the title and the Champions League of course," he added.
Arsenal begin their Premier League campaign on Sunday away to Liverpool.
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