The 22-year-old has been heavily linked with a move to Premier League giants Arsenal throughout the off-season, with les Gones president Jean-Michel Aulas recently claiming he was confident of rebuffing any approach for the midfielder.
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"My progress at Lyon is not over yet," Grenier said at a press conference.
"I have had a good last six months but I still have a lot to learn here."
Meanwhile, head coach Remi Garde was delighted to tie the France international to a new deal.
"I am very happy to continue working with Clement Grenier. Hopefully we can help him progress further."
Club chairman Jean-Michel Aulas then went on to reveal a number of high-profile players are likely to leave the club ahead of the new season.
France international trio Bafetimbi Gomis, Jimmy Briand and Yoann Gourcuff have all been linked with departures in the close season and Aulas is welcoming offers for all three.
He added: "Bafe and Jimmy Briand are awaiting departure. For Yoann Gourcuff, we are looking for opportunities."