The Belgium international, a powerhouse centre forward who caught the eye in his debut season in the Premier League with 19 goals, has extended his deal at Villa Park until 2017, the club said on their website (www.avfc.co.uk) on Friday.
Benteke had been linked with a number of Premier League clubs including Chelsea and Tottenham Hotspur, but said he had decided to remain at the club, who finished 15th last season, after talking with manager Paul Lambert.
"I am very happy to be back here in Birmingham and at Aston Villa, and to sign a new contract. This is a great club and it has given me a lot," he said.
"Now I have to give back to my team mates and the fans who have always been right behind me."
The 22-year-old did not travel on the Midlands side's pre-season tour to Germany because he has been given extra time off until July 18.
Villa Manager Paul Lambert said: "I had a full and frank discussion with Christian Benteke on his return to training this week regarding his future.
"I'm delighted, having time to re-evaluate his future, Christian has decided to commit to the club. It's a huge bonus and I'm sure the supporters are every bit as delighted as me to have him on board and raring to go."
(Reporting by Toby Davis; editing by Alan Baldwin)
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