The American goalkeeper, who joined the Club on a four-year deal in 2019, has put pen to paper on new terms which keep him at the Etihad Stadium until the summer of 2025.
The 26-year-old admitted it was a simple decision to extend his stay because being at City gives him the opportunity to work in an environment that demands the best of players.
“It’s the culture in the whole club,” he told mancity.com when asked what motivated him to sign a new deal.
“The drive to get better each day and fight for trophies in four tournaments each year. The drive to be the best you can be, each and every day and every game.
“It was a no-brainer to extend my contract.”
Initially loaned to German outfit Fortuna Dusseldorf, Steffen arrived in Manchester ahead of the 2020-21 campaign to provide competition for Ederson as the No.2 goalkeeper.
He enjoyed a memorable first season at the Etihad, helping City lift the Carabao Cup at Wembley Stadium in April, whilst also becoming the first American to win the Premier League.
The US international has made 16 appearances to date and has proved to be a more than capable deputy for the Brazilian, with his ability with the ball at his feet making him an ideal player for Pep Guardiola’s preferred system.
Last month, the City boss revealed how pleased he has been with Steffen’s performances and the goalkeeper shares his manager’s belief that he has made significant improvements since joining the Club.
“It’s always nice when you get praise from one of the best coaches ever,” he added.
“My composure I would say [has improved], my playing out from the back.
“I feel more settled and I feel like the guys have more trust with me now. I feel more comfortable on the ball, and I am able to make the plays that I need to make.
“At Columbus [Crew], we played a similar playing style. That helped me understand the game a little bit more.
“Coming here, it’s faster players, better players and smarter players, so it took time to settle, but now I feel part of it.”