The Belgium international has agreed to remain with Diego Simeone's side until 2022 and the club says he gives it plenty of options in attack and can help the team improve.
Yannick Ferreira Carrasco has committed his future to Atletico Madrid by signing a two-year contract extension, the Liga club has announced.
The Belgium international has enjoyed some superb form this season, scoring the winning goal in the Champions League victory over Bayern Munich before netting a hat trick in the 7-1 thrashing of Granada.
Carrasco - who also struck the late winner in the 1-0 win away to Rostov on Wednesday - had been linked with a possible move to Chelsea next year as a result of his exceptional displays, though he maintained that he wanted to stay at the Vicente Calderon.