The England left-back's four-year contract ends speculation over a move to Manchester United, who tried to sign him last summer.
And the priority now is success with Everton as they aim to stay competitive at the top end of this season's Premier League.
"I am delighted to have agreed the new deal," he told the club website. "I am very happy at Everton and always have been. It's a fantastic football club and I am excited about what we can achieve here in the next few years.
"I have a great relationship with the chairman and also the manager, the staff, the rest of the lads and, of course, the supporters. I've loved every minute of being here since I first joined in 2007 and I couldn't be happier.
"I've never been one to relish the limelight so I suppose I'm glad that the speculation will go away now."
Everton are within a point of the top four and have an FA Cup fifth-round tie against Swansea in the offing in Roberto Martinez's first season.
Baines said: "There is a really confident buzz about the place just now and that's being reflected in our performances.
"We're well-placed in the Premier League, we're in the fifth round of the FA Cup and although we've got a few injuries, we feel as though we are ready for every challenge.
"The ambition is to bring some success to the club. That's what all the lads want and that's what we're all working together for.
"The Everton fans deserve success and I am just happy to be in the privileged position of being able to try and provide some for them."