The Brazilian had been entering the final year of his deal but has elected to prolong his stay at St. Mary's until 2014 as the Saints prepare for life back in the Premier League
The Brazilian forward, who joined the Saints from Cesena in the 2011 January transfer window after a successful loan spell, was entering the final year of his deal at St Mary's but has now penned a one-year extension.
Guly made 42 appearances in the Championship last season, including 36 starts, and scored 10 goals as Southampton clinched promotion to the Premier League.
"I'm very happy to have signed a new contract," Guly told the club's official website.
"To be able to stay here for another year to help the team was very important to me, and I think I have a big opportunity this season.
"I'm happy and my family are happy to stay here, so it was good to sign a new contract.
"Everything has gone well in the last two years - the team has come back into the Premier League and we have a good chance to do well this season.
"We are going to play in big stadiums against big players and the fans are going to be happy to see these teams in Southampton again.
"It's going to be fantastic because I have a big chance to show people what I can do."
The 30-year-old spent time at a total of seven clubs in Italy after leaving Portuguesa Santista of Brazil in 2002.
He then made the jump to England in time to help Southampton achieve back-to-back promotions under Nigel Adkins