The Brazilian forward, who has scored 22 goals in 85 appearances for Saints, will now stay at St Mary's until at least the summer of 2014.
He told the club's official website: "I'm very happy to have signed a new contract.
"To be able to stay here for another year to help the team was very important for me, and I think I have a big opportunity this season. I'm happy and my family are happy to stay here, so it was good to sign a new contract.
"Everything has gone well in the last two years - the team has come back into the Premier League and we have a good chance to do well this season.
"We are going to play in big stadiums against big players, and the fans are going to be happy to see these teams in Southampton again. It's going to be fantastic because I have a big chance to show people what I can do."