The Colombia international has bagged an impressive 24 goals in 31 games across all competitions, helping the Principality outfit to the top of Ligue 1.
They have also progressed to the last-16 of the Champions League, where they need to overcome a 5-3 deficit against Manchester City in the second leg on Wednesday.
"This season, I've been playing consistently. The club has full confidence in me, the staff and my team-mates make me feel important. With confidence, the rest comes naturally," Falcao told the club's official website.
"I don't think players forget how to play football. I just needed playing time and continuity. You don't forget how to score goals.
"We're at a crucial stage in the season. In the Champions League, one mistake in a game can be fatal. We need to raise our level of concentration to make up for our lack of experience in this competition."