The attacking midfielder will remain with PSG until June 2024 having agreed to a deal following a season in which he has made only 12 league starts.
Despite being used in a rotational role behind the established front three of Neymar, Kylian Mbappe and Angel Di Maria, Draxler has excelled as a creative force for PSG.
Indeed, he has created 30 chances in Ligue 1 in 2020-21, more than any other PSG player outside of their starting attacking trident.
Across Draxler's PSG career, that tally is only topped by the 41 chances he laid on for his team-mates in the 2018-19 campaign, when he provided seven assists.
And Draxler is hopeful of not only recapturing that form but improving on it after extending his stay with a PSG side that must better Lille's result on Sunday to avoid losing the Ligue 1 title for the first time since 2017.
"The club's ambitions have become a reality. We played in the semi-final of the Champions League this season and in the final last season," Draxler told PSG's official website.
"We have progressed a lot, and even though we have been through highs and lows, the project is a very attractive one and I am happy to be able to continue here.
"I have been playing a lot more in recent weeks, it's important for me to be able to maintain my rhythm and play matches.
"I feel very good and you can see that in the final weeks of this season.
"We will have a better pre-season this summer than we did last year, we hope that everyone will be ready and that Paris will see the best Draxler ever!"