Carsley has made 149 appearances for Everton since joining them from Coventry City for £1.9million in 2002.
The Republic of Ireland international has beeen linked with a move to Wigan Athletic.
Carsley told Everton’s website: “I have had a fantastic time here and hopefully that can continue. We have the Uefa Cup to look forward to now.”
He added: “Myself and the gaffer David Moyes sat down two or three months ago and he said he wanted me to stay and I said I wanted to stay as well.
“I am just glad we have come to an agreement. I am absolutely delighted to be honest.”
