The 29-year-old, who has 298 first team appearances for Chelsea, has been vital this campaign with new coach Maurizio Sarri making him on-field captain in many Premier League games.
"Hopefully there is a lot to come and we can keep Chelsea where it belongs," said Azpilicuelta on the Chelsea website.
Meanwhile Chelsea director Marina Granovskaia called the defender "one of our longest-serving players and... a fantastic acquisition over the past six years."
"His professionalism and consistency in that time have been second to none and he has also developed into one of the squad's most influential players."
"This new contract will take Cesar to 10 seasons at Chelsea, and we hope that over the next four years he will be a key part of our success," she said.
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