The 25-year-old Ecuadorian joined the Reds from Wigan Athletic in the summer of 2009 and has made 69 appearances, scoring 10 goals. He has won one Barclays Premier League title and a Carling Cup winners’ medal.
Sir Alex Ferguson said: "Antonio has made a fantastic contribution since his arrival. His speed, crossing ability and versatility have been a big asset for us.
"He has a quiet, unassuming way of going about his business, which is underlined by great strength of character – as his recovery from such a bad injury last season proves."
Valencia said: "I am delighted to stay at United. Since my first day at Carrington, I have been happy here. I hope that I can continue to develop as a player.
"I am looking forward to making my contribution to helping this squad compete for more trophies."