The 24-year-old midfielder has produced some impressive displays for Saints on their return to the top flight, missing just one Premier League match and weighing in with four goals.
Southampton's 4-2 defeat by Newcastle on Sunday keeps them just above the drop zone, but Schneiderlin is confident they will continue to progress after extending his stay at St Mary's until the summer of 2017.
"I am a very happy man," said the Frenchman.
"To commit my future to Southampton is a big thing because this club has big ambitions - and I have big ambitions as well.
"I wouldn't have signed this contract if the club didn't have a big project. When I spoke to the chairman and the manager, I knew they wanted to do something very good at this club and I want to be a part of that.
"My main focus now is to do a great job on the pitch so we achieve all of the ambitions that we have."
Manager Mauricio Pochettino has welcomed Schneiderlin's decision and feels he can emerge as one of the top midfield players in the country.
"I am delighted that the club has been able to extend Morgan's contract," Pochettino said.
"During my short time with Southampton, Morgan has shown what a capable player he is and has demonstrated his potential to become one of the Premier League's most complete midfielders.
"His work-rate and determination make him an integral part of how we play, and so I am pleased he has been rewarded with a new long-term deal.
"Morgan has played a major part in the journey this club has been on over the past four years, and I am sure he will continue to develop as a player as we move towards our long-term ambitions."