The 33-year-old former England striker scored 15 goals last season to help Sunderland avoid relegation from the Premier League.
Black Cats manager Sam Allardyce called Defoe "one of the greatest goalscorers in the history of the Premier League".
"He proved that beyond doubt last season," added Allardyce. "He is in fantastic physical condition."
Jermain Defoe has signed a one-year contract extension that will keep him at Sunderland until 2019.