Mulumbu has been rewarded after finding form under Baggies boss Steve Clarke last season, with West Brom also including the option of a further year in the new deal.
The 26-year-old has declared that he is delighted to pledge his long-term future to West Brom, with the added bonus of playing alongside close friend Nicolas Anelka in the Midlands this season.
He told the Birmingham Mail: "I'm delighted. I came back from my holidays and saw my friend Nicolas [Anelka] had signed, and now I've signed a new contract.
"I think we'll sign more good players and I'm really looking forward to the new season."
Baggies boss Clarke believes that Mulumbu is capable of reaching new heights for the club in the next two seasons, becoming an integral part of his plans moving forward in the process.
He told the club's official website: "This is good news for everyone connected with West Bromwich Albion.
"Youssouf is an important player for the group, the number of games he's played in the past few seasons underlines this fact.
"The really pleasing thing is that Youssouf should now be coming into his best years as a footballer and will hopefully spend them here."
Mulumbu has made more than 130 appearances for West Brom, since signing from Paris Saint-Germain in 2009.