Wilson has been Newcastle's main source of goals since joining from Bournemouth for £20m in September 2020.
The 31-year-old has scored 40 goals in 79 league games, including 18 last season which helped propel Newcastle into fourth position and qualify for the UEFA Champions League.
The former Coventry City striker's previous contract would have expired at the end of this season but he will now remain at the club until 2025.
"I'm delighted to extend my time here," Wilson told nufc.com.
"It's a fantastic football club, I've been welcomed ever since I came through the door and now the club's going in a fantastic direction and on a journey so it's nice to commit my future to be to being a part of that.
"We've got some great things to look forward to and I think being around here, the city, fan base, is what players dream of so I can't wait to be around for the next few years.
Newcastle manager Eddie Howe, who previously worked with Wilson at Bournemouth, added: "We're very pleased because Callum has been an integral part of our success.
"He's an outstanding person, an outstanding footballer and I'm delighted he's going to be with us for longer.
"He's an incredibly motivated person and I've never seen Callum not motivated to score goals. I think that's a great thing for a striker.
"He's always there in training and in games, wanting to score goals, and I'm sure that'll be driving him on to achieve more and more with Newcastle United at a very exciting time for the club."
Wilson has scored two goals in four games this season.
