The 32-year-old's new terms bolt a further 12 months on to his previous deal at Signal Iduna Park, which he agreed last April.
He is one of the remaining members of the side that won back-to-back Bundesliga titles under Jurgen Klopp in 2010-11 and 2011-12.
"We are delighted to - after Marco Reus - tie another player to our club for long term who identifies absolutely with Borussia Dortmund," said chief executive Hans-Joachim Watzke.
Dortmund have not lost any of the past 31 Bundesliga matches in which Piszczek has participated – a run that covers the tenures of Thomas Tuchel, Peter Bosz and current boss Peter Stoger.
Indeed, the run of five defeats and three draws in eight winless top-flight matches that ultimately curtailed Bosz tenure earlier this season coincided with Piszczek being out with a knee ligament injury.
"I am not a native of Dortmund, but this club and these fans have grown so dear to me over the years that I feel like a real Borussia fan and have never felt the desire to want to leave BVB," the experienced defender said.
"I would like to end my career in Dortmund and look forward to many, many more emotional moments here."
Dortmund lie third in the Bundesliga table, a point behind Schalke in second, and will look to overturn a 2-1 deficit form the first leg of their Europa League last-16 clash against Red Bull Salzburg on Thursday.