The agreement is reportedly for six years and worth $120.6 million, nearly half of which is guaranteed.
"It's not really about the money," Flacco, 28, said at a news conference. "It's about the respect."
Flacco, who was drafted by the Ravens in 2008, was in the final year of his rookie contract as he helped Baltimore to a 34-31 win over San Francisco last month in Super Bowl XLVII. He was voted the game's Most Valuable Player.
The 28-year-old quarterback has started all 80 regular-season games the last five seasons, passing for 17,633 yards and 102 touchdowns against 56 interceptions. The Ravens have advanced to the playoffs in each of Flacco's seasons.
Flacco's new deal, which includes a $29 million signing bonus, tops the $100 million contract signed by New Orleans quarterback Drew Brees.