Sissoko has signed up until 2011 and after doing so said he never wanted to leave the club despite stories linking him with a move to Juventus.
"It was never in my thoughts to leave Liverpool," the Mali international told the club's official website.
"I read about the speculation linking me with other clubs but I am already at a big big club and it's an honour for me to be able to call myself a Liverpool player.
"I feel fresh and can't wait for the new season to start. I am injury-free and although I know I'll face a battle for a place in the team as we have so many great midfielders I'm prepared to fight for a position.
"It obviously gave me a huge boost to my confidence that the manager believes in me and wanted me to stay at the club. Now I want to repay him on the pitch."