The Saints Academy product has scored three goals in 22 games for the South Coast club since joining on loan in October - 15 years after bursting onto the scene for Southampton as a 16-year-old.
“I’m not sure I can properly express how happy I am about this,” said Walcott, who is now 32-years-old.
“Southampton is a club that means so much to me, and it has been incredibly special for me to have spent this season back at St Mary’s. But to now have the opportunity to return for a further two years means such a great deal to me, both personally and professionally.
“I would like to say a huge thank you to the club, my teammates and the fans for making me feel so welcome back here, and I can’t wait to continue pulling on the shirt in the next couple of seasons. Hopefully in that time we can make a few more special memories too.
.@SouthamptonFC is a club that means so much to me, and it has been incredibly special for me to have spent this season back at St Mary’s.— Theo Walcott (@theowalcott) May 18, 2021
But to now have the opportunity to return for a further two years means such a great deal to me, both personally and professionally. pic.twitter.com/IWxHLTMwaW
Walcott became Southampton’s youngest-ever first-team player in August, 2005 when he made his senior debut aged 16 years and 143 days.
Months after that aforementioned debut, he left Saints in the second tier for Arsenal, where he scored 108 goals in close to 400 appearances for the North London club.
Walcott also accumulated 47 England caps during his time with Arsenal.
In January, 2018 Walcott signed with Everton for £20m but soon found himself short of first-team football - leading his loan move back to Saints last October.
Unlike some other recent loan signings such as Kevin Danso (remember him?) and Takumi Minamino, it’s clear that Walcott has impressed Southampton manager Ralph Hasenhuttl. So much so, Walcott has started ahead of some permanent players on a limited Southampton squad and, ultimately, did enough to earn himself a permanent contract.
“Theo has been a very good influence for us this season,” said Hasenhuttl. “He is a very professional player who does things in the right way and has a very positive impact not only on our young players but on the dressing room as a whole.
“He understands the way we want to play, he has shown great commitment and he has also shown how he can be an important part of our game. I think he is a player who can continue to help us in these next two years, so I am pleased that he has agreed to stay with us.”