According to BBC Sport, it is a new five-year deal worth £100,000-a-week which will see the 24-year-old remain at Anfield until June 2020.
Former Liverpool striker Collymore is pleased to see the Premier League outfit ascertain that the 24-year-old is committed to the club in the long term.
“With Steven Gerrard leaving, Raheem Sterling's endless contract situation, the lack of Champions League football next season and the FA Cup loss, the Reds had to "sell" the club back to the supporters,” the 44-year-old wrote in Bleacher Report.
“The best way to do that is to look at the most popular players at the club, who have done well and deserve to be rewarded. One of those players is Henderson.”
Collymore added: “But this is a contract that says to Liverpool fans: ‘We know this has been a disappointing season, but we're going to give you something good to go away with this season’.”
Henderson joined Liverpool from Sunderland in the summer of 2011 and has established himself as a key member of the team over the past couple of seasons.
Last season, the Englishman played an important role in the Reds’ second-placed finish in the Premier League, and this term he has been one of the better players for Brendan Rodgers’ side.
In 31 Premier League appearances so far this season, Henderson has scored six goals and created 52 chances, while having a pass accuracy of 82% and a shot accuracy of 39%.