The 26-year-old moved to England in the summer of 2007 from Dinamo Zagreb and has since scored 18 goals in 48 appearances, having seen his career halted by an horrific injury sustained against Birmingham City in February 2008.
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This season Eduardo has netted three times for Arsenal, with manager Arsene Wenger delighted to have secured the future of a valuable member of his squad.
He told the club's official website: "We're delighted that Eduardo has signed a new long-term contract with us.
"Eduardo is a special player with huge talent and natural goalscoring ability and we're all so happy that he has committed his future to Arsenal Football Club.
"We have also seen in his come back from injury, Eduardo is a human being full of courage, bravery and commitment. His full recovery from this injury is a testament to Eduardo's character.
"We all look forward to enjoying Eduardo's performances in an Arsenal shirt for a long time to come."