Peters, 32, was entering the final year of a contract that would have paid him $10 million in salary and bonuses for 2014. The new deal adds four years and $41.3 million, including $19.55 million in guaranteed money, Peters' agent told ESPN NFL Insider Adam Schefter.
The Eagles tweeted out a picture of Peters signing his deal.
- Philadelphia Eagles (@Eagles) February 26, 2014
The deal runs through 2018, when Peters will be 36. It likely locks up the six-time Pro Bowl left tackle for the rest of his career.
"They didn't want to risk losing me and I didn't want to go anywhere, and I let them know that,'' Peters said. "I want to retire here. I love this organization. I love Philly.''
Peters tore his Achilles tendon while working out in March 2012. After having surgery, he tore the tendon again and missed the 2012 season, when the Eagles went 4-12 in Andy Reid's final year in Philadelphia.
In 2013, Peters faced the dual challenges of returning from the injury and playing for a new coaching staff. Chip Kelly, who installed a fast-paced offense, said he was immediately impressed by Peters' combination of athleticism and 6-foot-4, 325-pound size.
"There aren't many people cut from the same cloth as Jason Peters," Kelly said in a statement released by the team. "To be able to bounce back from two Achilles injuries and return to an All-Pro level speaks not only to his incredible athleticism but proves just how hard he works at his game.
"Having him at left tackle provides a lot of comfort to our quarterback and to our entire offense. He's a guy that many players look up to in our locker room."
Peters started all 17 games last season, including Philadelphia's playoff loss to the New Orleans Saints. He missed only a handful of offensive snaps due to a relatively minor quadriceps injury.
Peters also reasserted his hold on the left tackle spot. The Eagles used their first-round draft pick last year, No. 4 overall, on Lane Johnson, who played all 17 games at right tackle. The expectation was that Johnson could move to the left side if Peters faltered.
Wednesday's new contract put that possibility to rest.
"Jason is everything you look for in a left tackle," general manager Howie Roseman said. "The unique blend of size, speed and athleticism that Jason possesses is something that everyone wants in an offensive lineman. However, what really makes him unique is his desire to improve day in and day out despite the fact that he's played at an elite level for so many years."
Peters entered the league as an undrafted rookie tight end with the Buffalo Bills in 2004. He was converted to tackle and, by 2007, was a Pro Bowl left tackle. The Eagles traded for Peters in 2009, and he immediately filled the void left by the departure of Tra Thomas.
"I got a $5,000 signing bonus in Buffalo,'' Peters said. "I never thought this would happen. I believed in myself. This is a dream come true.''
The Associated Press contributed to this report.