The 32-year-old, who was dropped after the third Test in England's disastrous 5-0 Ashes whitewash this winter, is now tied down to the club until the end of the 2015 season.
"I'm absolutely delighted to sign another contract for Sussex," Prior told the club's official website. "It is an honour to continue to be part of the club where I have spent my professional career and Hove is a very special place to me.
"I am very much looking forward to helping Sussex compete for trophies again this season and I hope to be a part of future success, something I know that everyone connected with the club works very hard for."
Prior, who made his Sussex debut back in 2001, has reached nearly 13,000 first-class runs in his career.