The Frenchman has suffered two broken legs in the last 18 months, and the club were reported to have only offered the full-back a 12-month extension to his current deal, which expires in 2014.
However, Sagna has moved to dismiss reports that he is unhappy, stating his desire to remain at the club after they stuck by him through his injury nightmare.
"I'm very happy," Sagna said.
"I'm very happy to be back to football and to play for Arsenal.
"I'm looking forward to playing more games this season because I've been injured lately."
Sagna has made seven appearances this season after returning from injury to face QPR in October.
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