In the 2015-2016 season, Saul established himself as a first team regular, playing 48 games and scoring nine goals, and last season he clocked up 53 games and scored another nine goals, four of them in the UEFA Champions League.
"I will work as always to repay the trust the club has shown in me on the field".
In a statement he told the club's official website: "I am very happy because at Atletico we are a family and there is no better place to be".
Niquez had been linked with Manchester United previously but quelled the rumours at the first opportunity saying he had "no intention to leave" when asked on Tuesday. "I want to thank all my teammates and the coaching staff for their help day by day to be able to be the player I am today".
Antione Griezmann committed his future to Atleti after the Court of Arbitration for Sport upheld FIFA's transfer ban which left the club unable to register any new players until January.
Germany shocked the tournament favourites in the final on Friday night to lift the trophy, but Saul returns to Spain with his reputation enhanced, and Atletico have swiftly moved to improve his terms, which previously included a £71million buyout clause.
He said: "Saul is an example for all the kids in our Academy". "An example of giving, teamwork, solitary on the field and an impressive quality".