Insigne featured in all but one of Napoli's Serie A games last season, only missing the final fixture of the campaign against Roma through suspension.
Rafael Benitez has already confirmed he sees the diminutive attacker as a key part of his plans after replacing Walter Mazzarri as Napoli boss in the close-season.
However, he had to settle for a place on the substitutes bench as Napoli began their league campaign with a 3-0 win against Bologna at the weekend.
Having been a transfer target for Premier League side Sunderland earlier in the close-season, Insigne has ended all speculation by signing a new deal with the club that will run until 2018.
"I met Insigne and we signed a new five-year contract," De Laurentiis announced on Twitter.
"I wish 'Lorenzinho' to have a great career with Napoli."
The 22-year-old starred for Italy in the UEFA Under-21 European Championships, where they reached the final, only to lose to Spain.
Insigne created two goals in four games and also netted a stunning free-kick against England in the group stage.
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