Speculation had started to grow about the Brazil international, who had just over a year to run on his previous deal, but the 24-year-old had no intention of leaving Anfield.
And having seen new owners, a new manager and two new record signings arrive in the last six months Lucas believes the club can start to look forward to regaining their place among Europe's elite, and said: "Everyone wants to be in the Champions League again and to win titles."
He added: "That is what Liverpool is about. The way everything is going I think it will be a very good next few seasons.
"We have some new players who have come here and that shows we are moving in the right direction.
"I am pleased with the way Liverpool tried to keep me and now I want to keep doing my best for them.
"For me it was an easy decision because I know how big Liverpool are and I can see Liverpool are committed to me and are planning for a future with me.
"I don't think people thought I could stay here for so long, but now I want to just keep on improving."
Manager Kenny Dalglish praised the likeable Brazilian, who just over a week ago was celebrating the birth of his son Pedro, not only for his work on his pitch but his attitude off it.
"He is a smashing lad to have around the football club but he hasn't been signed for that, he has been signed because of what he does on the pitch," said the Scot. "Certainly since I came in he has been a great asset to the team and has done tremendously well."
Source: PA