The former France youth international midfielder, who was reported to be attracting interest from Arsenal, penned a new two-year deal at the Stade de Gerland.
Club president Jean-Michel Aulas was keen for the 22-year-old to remain with the Ligue 1 side after chipping in with seven goals last term.
And despite the club exiting the UEFA Champions League in the play-off round against Real Sociedad, Grenier believes he made the right decision to stay with Lyon.
"I don't have any regrets about extending my contract, quite the contrary," he told RMC Radio.
"I'm still learning. I hope that we're going to have a good season."