The 27-year-old midfielder, who had 12 months remaining on his existing deal, has now been tied up until the end of the 2020-2021 season.
Head coach Dick Advocaat said: "Lee is the controller of the side. He is a motivator, a leader and central to the success of our team. To know that he will be with us for many years to come is very important to the club."
Cattermole, who started his senior career at Middlesbrough after graduating from its academy, joined the Black Cats from Wigan Athletic in a $12.26 million switch during the northern summer of 2009.
He is approaching 150 appearances for Sunderland, but might have left Wearside two northern summers ago when he was deemed surplus to requirements by then head coach Paolo di Canio and left to train with the youth team.
However, the Italian's successor Gus Poyet restored him to the senior ranks and he played a key role in the club's so-called 'great escape' at the end of the 2013-2014 season before being linked with a move to Stoke City.
He proved a central figure in Advocaat's team as he dragged the club back from the brink of relegation once again at the end of last season, earning the Dutchman's admiration and ultimately, an extended stay with the club.
Sporting director Lee Congerton said: "Lee is a hugely important part of our team, both on and off the field.
"He has 10 years of experience playing in the Premier League, which is incredible when you consider he is still only 27 years old, and we are delighted that he has committed his long-term future to Sunderland."
News of Cattermole's contract was announced just a day after Advocaat landed his first northern summer signing, clinching a permanent deal for Liverpool defender Sebastian Coates.
