The 26-year-old's previous deal had been due to expire in 2027, and there had been talk of a potential exit after a difficult season in which he made just 23 Premier League starts and was subsequently left out of Thomas Tuchel's England squad for the World Cup.
Instead, Foden has opted to stay and reunite with Maresca, who worked as Pep Guardiola's assistant during City's Treble-winning 2022-23 campaign before spells in charge of Leicester and Chelsea.
Foden made his first-team debut for Manchester City as a 17-year-old under Guardiola in November 2017 and has since gone on to make 369 appearances for the club, scoring 110 goals and winning 20 trophies in total, including six Premier League titles, the Champions League and two FA Cups.
"Committing my future to City means everything to me," Foden said. "Playing for this club is all I've ever wanted to do and it's always an honour to wear the shirt.
"It's not lost on me that I've been lucky enough to be part of a historic period with so many titles won, but we're always looking to the future and trying to win more."
On working with Maresca again, Foden added: "I can't wait to work with Enzo again. He was brilliant during the Treble season – someone all the players respected and loved working with. His attention to detail, the small things that make a big difference, and even training with him at the moment, you can tell how good of a coach he is.
"He'd do one-on-one sessions with you after training – I did small finishing drills with him and things like that, and he really grew my game. The way he likes to play out from the back and play a lot of possession-based football suits my game really well, and hopefully it can help my game go to the next stage."
The new deal removes one of the more significant pieces of off-field uncertainty hanging over City's summer, which has also seen the club complete a club-record £116m signing of Elliot Anderson from Nottingham Forest as part of a wider rebuild under director of football Hugo Viana.
Viana said City were "incredibly proud" of Foden, describing him as a unique talent whose creativity has been a joy to watch since he first emerged through the club's academy as a boyhood City fan.
Maresca takes charge of his first full pre-season at the City Football Academy this summer, and Foden's extension is expected to be viewed as one of the more significant pieces of good news of the window given the uncertainty that had built up around his future in recent months.