The 25-year-old, who has won two FA Cups since joining from Bolton in 2016 and is closing in on 100 appearances has been a near constant for Arsenal this season, captaining the side against Everton last month.
Arteta praised Holding for his character off the pitch and in crucial moments of big games and said he can continue to improve in north London.
“Since I started as manager, I have been hugely impressed with Rob’s contribution to the club and the dressing room, on and off the pitch,” said Arteta. “The quality of his work every day on the training pitches is excellent and he is translating this into consistently high performances in matches.
“We all know Rob’s quality, which he has shown in his displays during the intense moments of those two FA Cup final victories.
“We are all very happy that Rob has signed a new contract, he is very popular with all the players and staff, and we’re looking forward to watching him continue to grow with us in the coming years.”
Arsenal technical director, Edu, said: “We are very happy to have signed Rob on a new contract extension. He is 25 years old, so is still coming into the peak of his career, and we are delighted that he’ll be with us during these important years.
“Rob has shown great quality and maturity on and off the pitch in recent months and is developing well. We are looking forward to Rob continuing his progression in the years to come.”