The Ecuador international has been converted into a solid right-back, having initially made a name for himself as a winger for both club and country.
Valencia has become a key performer for United boss Jose Mourinho this season, starting 23 games in all competitions.
Into his eighth season at Old Trafford, where he has won four major trophies, the 31-year-old expressed his delight at signing on with the Red Devils.
"Another year to give everything for the greatest club in the world @ManUtd. Happy to announce I've renew my contract 'til 2018," Valencia wrote on Twitter.