Speculation has been rife in recent months that 28-year-old would be moving on.
Newcastle boss Graeme Souness was especially keen on the former Arsenal and Southampton man, so manager Chris Coleman was delighted to secure Boa Morte for the long term.
Coleman said: “We’re not in the habit of selling our best players, we also want to plan for the future and he’s a big part of that.
“He can be the captain for five years as long as I’m here and he shows the same levels of commitment, performance and consistency.
"He likes it here, he likes the feel of the club and he knows that the fans absolutely idolise him.
"The staff around the club worship him, the players love him and that’s important for Boa because he’s a very passionate person, especially about football.
"He’s like a king here.”
By remaining at Fulham, where he's a first team regular, Boa Morte could enhance his chances of making Portugal’s World Cup squad.