Paul told lcfc.com: "I've said for some time that Leicester is where I want to play my football so I'm really pleased that we've been able to agree a deal that works for me and for the Club.
"I've really enjoyed playing here over the last three seasons and I'd love to make sure the next one is in the Premier League. As a squad we're determined to make the most of the good position we've got ourselves in, so it's important we kick on now."
City manager Nigel Pearson said: “Paul has been an important member of the squad in the last three seasons, achieving a very consistent level of performance, so I’m really pleased we’ve been able to keep him with us beyond this season.
“He is one of the more experienced members of our squad, an outstanding professional and a great character to have on the pitch and in the dressing room.”
Konchesky has been a regular in the City starting XI throughout his time at King Power Stadium, featuring prominently in the run to the Championship play-offs in 2012/13, as well as this season’s rise to the Sky Bet Championship summit.
The London-born left-back, capped twice by England, arrived on Filbert Way in July 2011 with considerable experience of Premier League and European football to his name, gathered from spells with Liverpool, Fulham, West Ham United, Tottenham Hotspur and Charlton Athletic.
Since joining the Foxes, Konchesky’s 116 starts represent 83 per cent of first team matches in all competitions, making him the Club’s most regularly selected outfield starter since his arrival.
His latest appearance came in Saturday’s 2-0 win over Middlesbrough at King Power Stadium, which extended the Foxes’ lead at the top of the Sky Bet Championship to eight points.