The 26-year-old, who made just two appearances last season after being sidelined with a serious knee injury, has agreed a deal which, PA news agency understands, will take him up to 2023.
Oxlade-Chamberlain, who moved to Anfield from Arsenal in the summer of 2017 for £35 million, has already made more appearances this campaign than he did in the whole of the previous one.
“I feel like I missed out on a year, which I obviously did, so it’s really exciting for me to be able to sign,” he told liverpoolfc.com.
“It’s something that I feel is an opportunity to give that year back and make up for lost time – and hopefully put in some good performances to make amends for not being around last year.
“You’ve got to count your blessings every time you get an opportunity like this, you don’t get the chance to play for Liverpool Football Club every day.
“I am really excited to be able to extend my time here.”
Oxlade-Chamberlain had finally found his form when his season was prematurely ended by a knee injury in a Champions League semi-final first leg in April 2018.
He has already shown signs of reaching those levels again in his three appearances this season and he is keen to return to top form.
“I hope that I can do some special things like I did before I got injured and, most of all, be a part of this group of players that go on to hopefully win more things,” he added.
“I’m really excited to see what the future holds for us all and I look forward to seeing them every game moving forward.
“I can promise the supporters that I’ll give them absolutely everything moving forward.
“There might be times where I have bad games and good games and moments where it’s not so good, but I’ll always work through those moments and give my everything to correct them and keep pushing this team forward.”
Manager Jurgen Klopp paid tribute to the midfielder’s attitude during his recovery period.
“We all know Alex’s story since he came to the club, and yes there have been disappointments as well as highs, but what has impressed me and everyone is his attitude to dealing with setbacks and his character,” he said.
“That’s why none of us were ever in any doubt about him fighting his way back in the way he did. To see him play almost the whole game at Southampton on Saturday was such a positive moment for all of us, especially him.
“Now he is no longer injured, he is fit and he can kick on and show once again just how good he is. But there is still a lot of hard work on that road.”