France international Koscielny has been rewarded with the improved deal following an impressive campaign at the heart of the Gunners defence.
The 28-year-old made a slow start to life in England after signing from French side Lorient in 2010.
But over the last two years Koscielny has forged a strong partnership with fellow centre-back Per Mertesacker, helping Arsenal keep 15 clean sheets in his 31 Premier League appearances this term as the Gunners secured fourth place in the top-flight table and also reached the FA Cup final.
“I am very proud to have reached agreement with the club on a new contract,” Koscielny told Arsenal’s official website.
“I have enjoyed four great years at Arsenal already, and I look forward to continuing to help the team in the years to come.”
Gunners manager Arsene Wenger had revealed earlier in the week that he expected Koscielny to sign the new contract and he added: “Laurent has proven himself to be an outstanding player since joining us in 2010 and has showed his quality once again this season.
“I am delighted he has decided to commit his future to the club.”