The announcement completes one of football's most dramatic turnarounds and represents a real feel-good story about a player who has always been the epitome of dedication and professionalism.
After signing For Liverpool from his boyhood club Sunderland in the summer of 2011 for a reported £16-million as part of Kenny Dalglish's revolution.
At the time, the fee seemed reasonable if a touch excessive for the 21-year-old, twice Sunderland Young Player of the Year.
What position Dalglish and then-Director of football Damien Comolli envisioned the England Under-21 captain playing remains up for debate, but Henderson ended up playing as right midfielder for the most part.
The season was a disappointing one for the Reds, despite winning the League Cup trophy and losing in the FA Cup final, and the failed signings of Henderson, Andy Carroll and Stewart Downing were to be blamed. Or at least that was the thinking of most fans.
Dalglish was soon sacked and Brendan Rodgers was appointed and the Ulsterman soon got rid of the latter two, but Henderson proved more difficult to shift.
After Joe Allen followed Rodgers from Swansea to Liverpool, Henderson was soon deemed excess to requirements and on the last day of the 2012 summer transfer window, an agreement was reached with Fulham to sign the former Sunderland player as a make-weight in a deal that would take Clint Dempsey to Anfield.
But Henderson had his heart set on remaining at Anfield and refused to entertain a move to the Cottagers, so Liverpool were stuck with him.
Under Rodgers, 'Hendo' was clearly not in his initial plans but with results not going particularly well, he was soon back in the starting line-up, although at no point did he have a specific role in the side.
With Rodgers changing systems and formations with regularity, Henderson regularly played in more than one position in each match, but what was ever-present was his commitment to the cause and impeccable work-rate.
Saying that Liverpool's resurgence in the 18 months that followed was due to Henderson's inclusion would be overstating the versatile midfielder's contribution, but by the end of the 2013/14 he was one of the first names of the team-sheet as central midfielder.
During Rodgers' tenure Liverpool had let go several long-standing, experienced players and Henderson's stature in the within the squad at that stage made him the logical choice as Gerrard's deputy for the 2014/15 season.
Fast forward 12 months and Henderson is now the man in the change-room everyone else looks up, just three years after being deemed not good enough for the Reds.