The 24-year-old committed his future to Anfield despite rumoured interest from Barcelona.
And Klopp is delighted with the 'big statement' made by keeping the talented playmaker.
Liverpool predicted XI to face Southampton
Tue, January 24, 2017
Express Sport brings you Liverpool's predicted XI to face Southampton in their EFL Cup semi-final second-leg clash
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Who will Jurgen Klopp start against Southampton in the EFL Cup?
He told Liverpoolfc.com: "This is wonderful news and I know everyone associated with LFC will be delighted when hearing this today.
“I think everyone knows what a great footballer Phil is, that is not in question – but not everyone sees what an incredibly positive character he is and what a big influence he is on the dressing room.
“I knew of Phil before I came to Liverpool and I was well aware of what a talent he was, but since arriving here I have not only witnessed his ability up close, but also his ever-continuing development. He is truly world-class – in that very top bracket.
Jurgen Klopp with Philippe Coutinho
“The fact he wants to stay here and be part of what we are looking to build and develop shows his personal commitment is to make himself better and be an integral part of something that is very special.
“We have total belief in our project, but when a player of Phil’s calibre and status commits for this length of time it shows that our faith is shared throughout the game. He knows he can fulfil his dreams and ambitions here at Liverpool. This is a big statement.
“I look forward to seeing Phil create many more great memories and moments for this club.”