The 30-year-old will lead the team in their first season back in the Premier League for 10 years following their Championship heroics in the 2013-14 campaign.
Morgan, who had one year remaining on his previous terms, is now tied down to the club until June 2017.
"I'm delighted to finally commit my future to this club," Morgan told the club's official website. "Winning promotion with this squad last season and lifting the Championship trophy were the proudest moments of my career and I can't wait to hopefully lead the team out on the opening day of the Premier League season.
"We've all worked so hard to win promotion and the whole squad is determined to make the most of it. There are some big challenges ahead in the next few years and I'm excited that I'm going to be part of it."
The defender has played for Leicester since 2012.