The 32-year-old was entering the last year of his deal, so the extension will keep him in Philadelphia through the 2018 season.
Peters' agent, Vincent Taylor, said the extension is worth $41.3 million with $19.55 million guaranteed. Peters will make $9.65 million in 2014 under the terms of his old contract.
Peters missed the 2012 season with a ruptured Achilles but was a first-team All-Pro player in 2013 after helping the Eagles to the best rushing attack in the league (161.9 yards per game).
"There aren't many people cut from the same cloth as Jason Peters," head coach Chip Kelly said in a statement. "To be able to bounce back from two Achilles injuries and return to an All-Pro level speaks not only to his incredible athleticism, but proves just how hard he works at his game. Having him at left tackle provides a lot of comfort to our quarterback and to our entire offense. He's a guy that many players look up to in our locker room."
Peters was drafted out of Arkansas as a tight end, but the Bills moved him to the offensive line midway through his rookie season. He played four seasons for Buffalo before the Eagles traded a first- and fourth-round pick to acquire him in 2009. SI WIRE: Report: Aaron Hernandez attacks fellow inmate