The new deal will keep the 25-year-old at the club until the summer of 2015.
The Uruguayan midfielder has become a key player at Napoli since joining the club three years ago.
What is your opinion? Feel free to discuss the article under. You have to comment by using your Facebook profile. Be fair and have respect for other people and opinions!
Chelsea have struggled to build momentum in the opening stages of the campaign and are currently looking over their shoulders at the relegation zone.
Who of Europe’s top strikers will move to England this summer?