A second-round pick in the 2011 draft out of Texas Christian University, Dalton has led the Bengals to the playoffs in each of his first three seasons but is still looking for his first postseason victory.
The deal, through the 2020 season, is worth at least $96 million, a figure that could rise based on success in the postseason, nfl.com reported.
"I'm excited about the future and that I'll be here for a long time," Dalton said in an interview on the team's website.
Dalton led the team to an 11-5 record last season, throwing 33 touchdown passes and 20 interceptions before Cincinnati fell to the San Diego Chargers in a wild card playoff game.
Overall, Dalton has posted a 30-18 regular season record in three years with the NFL club, but has thrown only one TD against six interceptions in the postseason.
Dalton, 26, said he would not feel added pressure after signing the big extension.
"I expect to go out and play well. That's the biggest thing. I don't think there is any more pressure," he said about expectations.
"The biggest thing hanging over me is I haven't won a playoff game. That's what we're striving to do. Not win just one, but win it all.
"Until that happens, people will always say, 'He hasn't done this, he hasn't done that.' I have to go out and accomplish that."
The Bengals open the 2014 season on Sept. 7 in Baltimore against the Ravens.
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