The current World and European player of the year still had two years of his current deal to run.
Vice-president Adriano Galliani revealed that negotiations had been completed quickly as the 25-year-old has stated his desire to become a true symbol of the club in the mould of captain Paolo Maldini.
He added: "He already is that and also the best player in the world.
"This contract is for the rest of his career and I hope that if he is still playing in 2013 that we will be able to get him to sign another one."
The Brazilian played a major part in propelling the Rossoneri to the Champions League last year and finished top scorer in the competition.
However, the attacking-midfielder has been plagued by a knee problem this campaign which will force him out of the Serie A Game Day 26 meeting with Lazio.
Defender Alessandro Nesta is also missing as he recovers from a recent injury but the pair are both expected to line-up against Arsenal in the Champions League next week.
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