The four-year, $34 million deal includes $20 million guaranteed, a source familiar with the deal told ESPN.com.
"Knowing my future, I don't have to sit here and worry about 'Where are we going to end up, where are we going to have to pick up and move to?'" Jackson told ESPN.com. "Knowing that I can be here in Houston is definitely a weight off my shoulders."
Jackson, who turns 27 on April 10, has started for the Texans since they selected him as the 20th overall pick in 2010 out of Alabama.
The Texans ranked last in pass defense in Jackson's first season, but stayed with him as he improved at the position.
In his career with the Texans, Jackson has 50 passes defensed, including 10 interceptions. He played outside for most of his career, but new defensive coordinator Romeo Crennel used Jackson in the slot for more snaps than the previous four years combined.
The Texans had conversations about Jackson's return prior to the 2014 season, but they never reached official negotiations. The Jets and Eagles showed interest in Jackson, sources said.
"I expected it to get done, but this weekend kind of got a little closer I was like wow, I may have to go to the market," Jackson said. "These last couple days my agent and [Texans general manager Rick Smith], they put their heads together."
During the NFL scouting combine last month, Smith had expressed pride in Jackson's development.
Jackson also tweeted his excitement about remaining in Houston.
Oh yeah Houston I'll be back in that #25 jersey next year!!!!!— Kareem Jackson (@ReemBoi25) March 7, 2015
Wow!!!! I can't begin to express how happy I am right now!! Definitely a great moment for me and my family right now!!!— Kareem Jackson (@ReemBoi25) March 7, 2015
ESPN NFL Insider Adam Schefter contributed to this report.