Jota arrived at Anfield in 2020 after the club splashed £41million on his signature from Wolverhampton.
The player adapted seamlessly into Jurgen Klopp's side and scored on his Premier League debut for the Reds against Arsenal.
Jota ended the 2021/22 campaign with 21 goals from 55 appearances across all competitions. The 25-year-old has also claimed three trophies with the Reds, including the FA Cup, League Cup and Community Shield.
He was also part of the team which came up short in last year's Champions League final against Real Madrid.
"Well, [I'm] really proud, I have to say," he told Liverpoolfc.com after signing his new contract.
"Obviously since I arrived two years ago I established myself as an important player in this team - that's what I wanted from the beginning.
"Now, signing a new long-term deal, it's obviously from the club's perspective proof of the belief in myself as a player. For me, obviously it's really good to establish I'll be here for a while.
"So, the beginning of a new season, let's do it."
Jota is currently on the sidelines as he continues his recovery from a hamstring injury.
Nevertheless, the forward is confident of winning more silverware with the team once he returns to action.
He added: "Unfortunately for me I had an upset in this pre-season because I got injured [in the] last game of the season playing with Portugal," he added. "So I was coming back in this pre-season, I felt it a little bit again. So it will be a few more weeks, I would say.
"When you fight for everything, like we did last year, you just want to do it again and to do it better, because it's possible.
"That drive is in me and I know it's in my teammates and all the staff. We have everything to fight for those titles out there."