It has been a decade since the 32-year-old moved to West London from Olympique Marseille for £7m.
Azpilicueta has been a faithful servant to Chelsea over the years and has won every available major club trophy in his time at the club.
The Spain international had been linked with a move to Barcelona in the summer transfer window, with Chelsea manager Thomas Tuchel admitting recently Azpilicueta was interested in moving to the Camp Nou.
But Chelsea have managed to convince the former Osasuna defender to continue his adventure at Stamford Bridge.
"I am really happy to extend my stay at Chelsea, my home," said Azpilicueta. "It is almost 10 years since I first arrived and joined the club, so I really feel the love and I am really excited for the new project we have in our hands.
"I would like to say thank you to (Chelsea owners) Todd (Boehly) and Behdad (Eghbali) for giving me the opportunity to keep my journey at this amazing club and I am really looking forward to continuing our adventure.
"I am a really proud captain and I hope we can share many good memories together."
Chelsea chairman Todd Boehly added: "We are so happy that Cesar is staying at Chelsea for a minimum of two more years."
"We are thrilled with our captain showing his exemplary commitment and leadership yet again. There is still so much to do together."
Azpilicueta has made 476 appearances for Chelsea, scoring 17 goals.