Vardy told the club website: "I'm absolutely delighted to be fighting to achieve something special with this Club, as part of this squad. I've never known a spirit like it -- from the owners, to the manager and his staff, the players and the fans. I want to be part of it for a long time.
"Leicester City have shown nothing but total faith in me since the day I arrived here three and a half years ago and it's impossible to measure how much that belief has helped me to improve. I'll forever be grateful for the investment the Club has made in me and I'll spend every day working to repay it."
Leicester City manager Claudio Ranieri added: "Jamie is a fighter. He has had an unbelievable journey to get to this point in his career and continues to play every game as if it's his last. I love his spirit, which is a quality I want in my players above all else.
"He has shown what a fantastic player he is and, more importantly, he is part of a fantastic group. I am very happy that he will stay with us for a long time."
Vardy set a new Premier League record when he netted in 11 straight games before Christmas and has helped the Foxes to move three points clear at the top of the table.
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