The Reds boss said that Milner's new contract is important for the club due to his leadership skills and "quality" out on the pitch.
“I am delighted by this news. It’s important for us – all of us,” Klopp told Liverpoolfc.com.
“A lot is often made of James’ leadership skills and his influence in the dressing room, and of course that’s correct and justified, but nobody should overlook his quality on the pitch, where he continues to perform to a level that meant we simply couldn’t afford to lose him.
“His professionalism is the benchmark for any athlete and it’s why he sets the tone for this team with his ability and attitude.
“We had the longest campaign possible last season and Millie only got stronger and better and more influential as it went on.
“Typically, the discussions we had around extending his contract were centred on: what kind of contribution do we see him making as a player?
“My answer to him was the same I’ll share with supporters: we don’t limit it. We just want the same from him again, because that’s not possible to replace. He can still do it and we still need it.
“So I’m grateful he answered the call and agreed to give us the extra year of his extraordinary career. More to come.”
Anfield Watch Verdict
What Milner has given to this club since joining back in 2015 has been amazing. He's been one of the main leaders in the dressing room and his ability to speak Spanish has definitely helped a lot of foreign players adapt to life on Merseyside.
The fact that he has extended his stay at Liverpool for another year shows how much Klopp and his coaching staff rate him. It goes directly against Fenway Sports Group's model to give someone of his age a new deal, but it seems like the German was a major driving force behind the extension.
I doubt Milner will be playing a major role on the field next season, but it'll be great to have him in the first-team to help the younger players adapt to the big stage. He will also keep the senior professionals level-headed.