"I've thought about this decision long and hard and I'm very grateful that the club officials allowed me the time to do so. But now I've made the choice I'm most comfortable with," Huntelaar, 29, said on the club's website.
"I've always felt at home at Schalke, with the club and the fans, and I want to send out a positive signal now because I believe in our team and I believe we can still achieve a great deal in the second half of the Bundesliga season.
"And we aren't without a chance against Galatasaray in the last 16 of the Champions League, of course," he added.
The news will be a boost for Schalke manager Jens Keller, who was promoted from youth team coach a week ago to replace the sacked Huub Stevens until the end of the season.
Schalke, who topped their Champions League group, have been struggling domestically with four defeats and no wins in their last six Bundesliga games leaving them in seventh place, trailing 17 points behind leaders Bayern Munich.
They travel to Turkey for the first leg of their Champions League first knockout round clash against Galatasaray on Feb. 20 with the return at their Gelsenkirchen stadium on March 12.
Huntelaar, who joined Schalke from AC Milan in August 2010, was the Bundesliga top scorer with 29 goals last season and has scored 11 times in all competitions so far this term.
He also broke Hermann Eppenhoff's club record, set in 1941, for the most goals in a season with 48 in all competitions in the last campaign.