If it can drop your grade, it is not really "extra credit". Usually when you give a student an extra credit task it is something that is capable of raising their grade (if they do it well) or is ignored if it does not raise their grade. (In other words, the task is usually treated as if it were a "redeemable" assessment.) For that reason, one plausible explanation here is that your teacher might just have made a mistake in how the assessment for that item was incorporated into your overall mark.
Under the circumstances, it would be reasonable for you to broach the subject with your teacher. No particular finesse is required beyond a simple sincere enquiry that does not make demands, and shows appreciation for other aspects of the teacher's work. I recommend you go and see your teacher and point out that your "extra credit" work dropped your overall mark, and first just check if this was intentional. If it was intentional that it should be marked this way, it would then be reasonable for you to point out that the item being called "extra credit" work seems misnamed, and it seems unfair to you that it would drop your overall mark.
As to not wanting to seem ungrateful to your favourite teacher, it might be nice if you would preface your enquiry by telling your teacher that he is your favourite and that you appreciate what a good job he has done on his teaching. People like to hear when others appreciate their work, especially if he has done a particularly good job with you relative to the other teachers. However, XanderHenderson makes an excellent counter-point in the comments below where he notes that this might come across as you "buttering up" your teacher, and he might prefer not to hear this part in that context. If after you've explained your concern, your teacher decides he wants to keep your mark as it is, and is comfortable continuing to call this type of task "extra credit" work despite its potential adverse impact on marks, then it would probably be best to thank him for considering the issue and leave it at that. (Let him then mull it over in his own time for use with future students.)
Finally, you will have observed in the comments to the various answers that there are some academics/graduates who do not like "quibbles" over what are already high marks, and so some will take an inherently negative view of anything that involves seeking to change a 98 to a 99. I am on the side of those who think that this part is irrelevant, and that it is still worth raising the matter to ensure that the marking is done correctly now and in future. I think CaptainEmacs puts it well in his comments below (for another answer) when he says that "[a] student that pays attention to these things is a student that achieves near full marks. That's the student you want to run your experiments or write your code or carry out your computations."