After overcoming two years of injury hell, Gomez has become an important player for Jurgen Klopp's team over the last 18 months and is now a regular pick for England as well.
"Signing this new deal means the world to me," the player told LiverpoolFC.com. "I've been at the club a few years now and have had the pleasure to play for Liverpool and experience what that means, so I am delighted to get the chance to extend my contract here.
"I love the club, I love playing and learning here, and I am happy for that to continue."
A lower leg fracture suffered earlier this month in the Premier League over Burnley is set to keep 21-year-old Gomez sidelined until the New Year. Prior to that he had started 12 of Liverpool's previous 14 league fixtures this season and was a Champions League regular as well.
Speaking about his Liverpool career as a whole, the former Charlton Athletic youngster said: "There have been a lot of highs and lows, it's my fourth season now and every one has been different. Obviously I would like to have had a few less setbacks along the way, but it has all been part of my journey - one that I have loved and embraced. I have learned so much.
"There have been good times on the pitch as well. Hopefully that can continue. I am learning under a great manager and great coaching staff and have all the tools around me to keep progressing and learning. I am looking forward to it."
Injury cruelly ruled Gomez out of last season's Champions League final against Real Madrid and cost him a place in England's World Cup squad.