there is actually a feature in Illustrator to do this even though it is not called Extract Images?
Not only that once you extract the image you can update it as well you do not have to lace it again and reposition it.
When I saw this and realize it was there I could not believe it as it has been asked so many times and there have been numerous work arounds.
The reason I think it has passed everyone by is that it is not located in the links panel.
So to the chase.
Edit>Edit Image
and then
Edit>Update Image
The former opens the embedded image in Photoshop
edit it there and then save it
then back in Illustrator go to the latter and it will be updated.
Never noticed this before.
The only draw back is that it seems to only work on one image at a time.
I wonder how many users here knew about this little feature?