The new deal was announced a day after Wiegman won FIFA's Best women's coach prize for 2023 after taking England to the Women's World Cup final for the first time in August, two years into her tenure as head coach.
"This is my home away from home," the former Netherlands player and head coach told reporters in London.
"One of my personal goals was to try and get into another culture and learn about it and connect people, that remains a challenge but I feel at home.
"Working for England, it is the biggest federation worldwide. England is at the highest level with the competition, with the players, with the way the FA approaches women's football," she added.
"We view Sarina as the number one coach in the world in the women's game and I would say (the deal amount) is according (to that)," the English FA's CEO Mark Bullingham said of Wiegman's new contract.
Wiegman, who led England to their first-ever Women's European Championship title in 2022, said the team was yet to deliver on its fullest promise.
"I feel with this team we can grow so much more, I just wanted to do another tournament with this team too... it is really nice to work in England and I see a lot of potential," she said.
