The 24-year-old, who scored nine tries in 22 appearances for the club last season, has revealed that he "loved" his first season in Scotland.
"I've loved my first season in Glasgow and I am really excited to have signed an extension to my contract. Everything here is so professional and it's the best place for me to continue my development," he told Sky Sports News.
"I've learnt so much since I came to the Warriors and my game has really improved. I like playing in the PRO12 - it's a strong league with a number of good players.
"We're a very close squad and I'm really enjoying my rugby just now. The supporters have been absolutely fantastic and I'm looking forward to playing on front of them at Scotstoun for at least another two years."
Matawalu's previous deal was due to expire next season.