The 32-year-old, who played every minute of City's march to Premier League glory, has made 196 appearances for the Foxes since joining them from Nottingham Forest in January 2012.
Morgan said: "To commit my future to Leicester City is a wonderful feeling. Everyone knows how I feel about playing for this club and with my team-mates, so I'm proud to have the chance to carry on wearing the shirt long term.
"Lifting that Premier League trophy was a moment I will never forget and it's still sinking in. Now we've got to give it everything to defend it, as well as showing what we can do in the Champions League."
The Jamaican added: "We all know that what we've got in that dressing room is something special, so I can't wait to get the new season started with the boys so we can once again give it our best for each other and for our fantastic supporters."