Eze has been one of Palace's most exciting players since signing from Queens Park Rangers in August 2020.
The 25-year-old has scored 16 goals and provided 12 assists in 93 Premier League appearances since joining the Eagles.
He was courted heavily by Manchester City during the summer transfer window but remained in South London after a deal failed to materialise.
“I’m delighted to have signed for the club for another three-and-a-half years,” Eze told the club's website.
“I’m now in my fourth season with the club and I’ve enjoyed it so far. I’m loving every moment. Hopefully the fans can expect more of the same in the future, God willing – I’m praying for exciting performances, fun times, goals and wins.”
Eze has won two caps for the England national team.
Chairman Steve Parish added: “As an England international and proven performer at Premier League level, his talents are well-known, but he also brings with that an exemplary mentality and character in everything he does.
“There is so much to admire about him as a young footballer and a young man, and his new contract is just reward for his performances and impact on the team. It is absolutely fantastic news for everybody associated with our club.”
