The 30-year-old has agreed terms on a new-and-improved deal which will keep him at the Hawthorns until 2014.
"I'm obviously very pleased that Peter has pledged his future to West Bromwich Albion," manager Roy Hodgson told the club's official website.
"I always believed this would be the case and I am grateful to both him and the club for reaching an agreement.
"We can now look forward to benefitting once again from Peter's goal-scoring prowess and seeing him play an important part in our campaign to stay in the Premier League for a second successive season," he added.
Odemwingie was named the Premier League's African Player of the Year last season in the Best of Africa Awards.