The Israel international has extended his stay until the summer of 2023.
The 28-year-old has made 21 appearances this season, mostly at centre-back, after returning from a serious knee injury earlier in the year.
Bitton said: "We negotiated for a little while and I'm just happy to sign the contract and put it behind me and commit my future to Celtic.
"Celtic is not a club that you leave for any opportunity. If you have the opportunity to stay at Celtic, you stay at Celtic.
"It's a massive club, one of the biggest in the UK and Europe, and it's a big opportunity for myself to keep winning trophies, keep winning titles, keep on top. That's my target.
"As long as you are at a club like Celtic you don't leave if you don't have something you cannot refuse.
"Celtic is something I was dreaming of all my life. When I came here in 2013, and signed for Celtic for four years, I would never think I would stay here for 10 years. It's a big achievement for myself and my family."
Manager Neil Lennon was delighted to tie up a player who gives him versatility and reliability.
Lennon, who initially brought him to Parkhead, said: "He has been here a while, he knows the club, he is a very good player and is coming into his peak years.
"Whatever role we ask him to do, he plays the position very, very well, either midfield or centre-half. He is really reliable.
"He had a very good game on Sunday and before the hamstring injury, he was playing some very good football. His performances in Stockholm and Ibrox were exemplary.
"I am delighted and I think he is delighted too. That will settle him down and give him some peace of mind away from the club in terms of security."