Arteta has penned a new deal ahead of Sunday's derby against Tottenham.
He said, "I'm really happy, really excited. I think it shows the alignment between the club and myself and the coaching staff that we're on this journey together and we enjoy working together. Now we have much higher ambitions and we want to fulfill them, so that’s the way that I look at it. As I said, I’m really pleased and grateful as well.
"I couldn’t think of a better place to be to develop my career as a player, to experience an amazing football club with the people that I met and the experiences that I had. Now as a manager, that is been something far beyond and better than what I ever dreamed about probably.
"We are in the right direction; we have made some huge steps and we have a lot still to make. You sense that hunger from ownership to the board to all the players and staff here, and this is the aim and objective.
"This is the emotional attachment that I have and that my family has, my kids have, the experience that I have and the involvement with the people. It’s too strong."