The 31-year-old joined the club on a short-term deal from Leicester Tigers in December, but has sufficiently impressed to gain a long contract with the Exiles.
Director of rugby Brian Smith told the club's official website: "Since Pat joined us at Christmas, we've won six from eight games, and he's been a major factor in our improved form in 2013.
"Patrick Phibbs is a class act. His vast experience in Super Rugby and the Aviva Premiership make him a great fit for our club."
Meanwhile, Phibbs added: "I've really enjoyed my time at London Irish. There is a great group of lads at the club and a lot of potential to go with it.
"We have shown in the last few weeks what we can do and I look forward to pushing on with London Irish over the next few years."
Phibbs has also played for the Exeter Chiefs.