The defender was strongly linked with a move to Premier League champions Manchester City over the summer.
“I’m happy because I am a part of one of the biggest clubs in the world,” Skrtel told Liverpool’s official website.
“After last season there was a lot of talk about my future but I have to say that the first priority for me was always to sign a new deal with Liverpool.
“For me it’s a great thing to play for Liverpool. I am proud to play for Liverpool with these great players – probably some of the best players in the world.
“I hope I can create history at this club and that the fans will always remember me – that’s my target for the future.”
“I have been here almost four-and-a-half years and I have enjoyed that time here – myself and also my family,” he continued. “So there were no questions about whether to stay or to leave.
“A lot of things have changed, a new manager has come. I think we can start to make history and I want to be a part of that history.
“We have our target. For this season it is the top four and I hope we can do it. Then we will see.
“I think Brendan Rodgers showed his quality with Swansea and now he’s carrying on doing that at Liverpool. He’s showed he’s a great manager and I hope we can play better football than we did in the last seasons and I hope we can get our target.”
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Liverpool have unveiled their new home kit for next season, sticking with the hugely popular retro styling of the current shirt.
The reputation of the Premier League means it is the most popular and one of the most watched leagues in the world.