The new deal will keep the 36-year-old forward at Roma until 2016.
"I have another two years of responsibilities and I'm sure we'll achieve some great things together," Totti said.
"I'd like to thank the president for this new contract. Everyone wanted it to happen, me and the club."
"I'm honoured that Francesco Totti is staying here and I'd like to toast to a great future for Roma and Francesco," said Roma president James Pallotta.
"I'm pleased with what we've achieved in the last few months. We're a work in progress and we're forging ahead."