Drinkwater has agreed a deal till 2021 with Leicester, where he has played for the last four-and-half years, the club's website said.
The 26-year-old played a pivotal role to help an unfancied Leicester side to title glory last season.
The England international joins the likes of Riyad Mahrez, Jamie Vardy, Kasper Schmeichel, Wes Morgan and Andy King in committing his future to the Premier League champions this summer.
Danny told the club's website: "I've loved playing for this Club, it's been perfect for me and my career and I want to be here for a long time to come. I couldn't be happier."
"I've grown a lot as a player and a person in the last four years and Leicester City has been a massive part of that. I owe a lot to the staff here for helping me get to this point -- they've been quality."
"And I love being part of this team. We've been through so much together and I'm sure there's a lot more to come."
He has made 177 appearances for the club since his arrival in 2012 from manchester United.
Leicester City manager Claudio Ranieri said: "Ever since I joined Leicester City, Danny has been one of our most consistent players. He's a fantastic player and a fantastic man."
"He's an important player for us and a very popular player in the dressing room. I want him to stay with us for a very long time."
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