Step 1: Definition of chelate effect.
The chelate effect is the extra thermodynamic stability of a complex formed by a polydentate (chelating) ligand compared to a similar complex with monodentate ligands having the same donor atoms.
Step 2: Thermodynamic reason.
When a chelating ligand replaces several monodentate ligands, the number of free particles in solution increases, raising entropy ($\Delta S > 0$), making $\Delta G$ more negative.
Step 3: Example.
$[Cu(en)_2]^{2+}$ (bidentate $en$) is more stable than $[Cu(NH_3)_4]^{2+}$ (monodentate $NH_3$), both with 4 N donors.
\[ \boxed{\text{Chelate effect: extra stability from entropy gain when ring-forming ligands coordinate.}} \]