The deal sees Ozil, 29, become Arsenal's all-time top earner with wages of £350,000 a week.
Ozil will stay at Arsenal in order to link up with Pierre-Emerick Aubameyang, who has joined on a club record fee from Borussia Dortmund.
The club have today confirmed that the star has chose to extend his stay at the Emirates.
If Ozil signs the new deal that would represent the biggest success of the transfer window for Arsenal.
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Leganes missed out on moving into the top-half of the table as Getafe scored a stoppage-time equaliser at Sevilla later in the evening.
With Alexis Sanchez joining Manchester United and Olivier Giroud heading to Chelsea, Ozil might have been concerned over their prospective replacements. The former Schalke and Werder Bremen star could have agreed a free transfer with an overseas club as of 1 January and was heavily linked with a summer move to Manchester United, but he eventually made a decision to remain at Arsenal, a place he sees as "home".
In a post on his official Instagram account, Ozil wrote: "Proud to announce: I signed dat thing".
'Good things take time! Once a Gunner, always a Gunner'.
He has 21 appearances over the current term and has recorded four goals and six more assists.
The Gunners lost their place in the Champions League altogether last season and Neville says it is up to players like Ozil to get Arsenal back to where they belong.