The youngster spent last season on loan back in France with Lorient, but has proved useful this term, as Arsene Wenger has deployed him in both midfield and as an emergency full back on occasion.
The 20-year-old has now made 16 senior appearances for the North London club, and has also represented France at under-21 level.
The news was released on The Gunners’ official website, but does not mention the length of the extension, only stating that it is a new long-term contract.
Coquelin’s versatility has been an added bonus for Wenger, who now uses the youngster in a squad rotation system.
Meanwhile reports in the press indicate that Wenger has stepped up his efforts to sign a new defender.
The Independent indicate that Arsenal and Chelsea are in a battle to sign Southampton prospect Luke Shaw.
The 16-year-old left back is yet to make a first-team appearance for The Saints, but is valued at £4 million due to impressive performances at age-grade level for club and country.
Arsenal have a track record of signing young players from the St Mary’s outfit, with Theo Walcott and Alex Oxlade-Chamberlain moving from the south coast to north London.
Wenger has also been linked with a move for Lyon’s Aly Cissokho, and Mirror Football have reported that The Gunners have had a loan bid for the left back rejected.
Lyon are believed to be willing to sell Cissokho for £8 million, but will not entertain a temporary deal.
By Gareth McKnight