Malouda, who had just one year remaining on his old deal, looked to be heading for the exit door at one point as he struggled to adapt to life at Stamford Bridge, but he has since flourished and become a key member of the first team.
"I was really happy when I heard it was Carlo Ancelotti because I have a lot of respect for him. At my former club Lyon I played many times against Milan. For me it is a really good choice and I believe in him," said Malouda.
"This year he wants to try the new system with a diamond so I have to adapt myself and that is why we are training really hard to do what the manager wants.
"It is a different role for me but that is part of my game, I can play in many positions, and I have played it a few times in Lyon when there were injuries and in the France national team I have played many times this position."