Stokes has committed himself to the club until the summer of 2016 after returning from a lengthy ankle injury lay-off this year in emphatic fashion.
The 25-year-old was man of the match in Celtic's 3-0 William Hill Scottish Cup final victory over Hibernian in May and his improved all-round play has seen him become Celtic's key centre-forward following the departure of Gary Hooper to Norwich.
Stokes has scored five times this season and created the goal that sent Celtic into the Champions League group stages when his quick feet and composure allowed him to set up James Forrest to hit an injury-time strike against Shakhter Karagandy.
Manager Neil Lennon was eager to secure the Irishman's future after he hinted he might speak to other clubs in January but Stokes was delighted to put the speculation behind him after reaching agreement with the club.
Stokes, who has scored 53 goals in 120 games for Celtic, told the club's official website: "I'm absolutely delighted and I'm just looking forward to the next few seasons. I'm just glad to get it out of the way and I can concentrate on my football.
"I've been happy enough with the way it's gone for me this season. I'd have liked a few more goals by now but that'll come. We're unbeaten in the league, we've been doing reasonably well in Europe and we need to get another couple of results now after that big win over Ajax.
"Overall, I've been delighted. I'm enjoying my football and I'm hoping this just helps me kick on.
"It's been great to be involved in Europe after being injured last season. It was hard to watch the lads doing well and not have any input, so I'm delighted so far with this season.
"I knew this was going to be a big season for me because I knew I had to come back after missing the majority of last season and I needed to come back strong and thankfully I've started the season reasonably well."
The former Arsenal, Sunderland and Hibernian striker recently won a recall to the Republic of Ireland squad following the exit of Giovanni Trapattoni, who he had fallen out of favour with, and played in their final two World Cup qualifiers.
Stokes, who signed from Hibernian in August 2010, said: "I'm delighted to be back involved in the Irish squad.
"You see the quality of the squad so I'm going to have to keep up my club form to try and stay involved in that. I've been happy with my form for Celtic, and I'm just glad to be involved."