The new deal will keep the 29-year-old at White Hart Lane until the summer of 2015.
Defoe had been linked with a move away from Spurs in recent months.
Defoe has made 300 appearances and scored 119 goals for Tottenham.
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The start of the 2017-18 Premier League season is just around the corner and is shaping up to be one of the most competitive yet.
As always it is the so called “big clubs” that have splashed the most cash in the transfer window so far this summer. Manchester United or City? Arsenal or Tottenham? Who are the winners and losers of the transfer window so far?