The 32-year-old has scored 16 tries in 124 appearances for Quins since joining from Bedford Blues in 2009.
"Karl is one of the most competitive and best people you will come across," director of rugby Conor O'Shea said.
"He has achieved a lot over the years with us and I know he will keep on pushing us and himself to be better."
Dickson, who is also a qualified referee, represented England against the South African Barbarians in the summer of 2012.
Harlequins scrum-half Karl Dickson has signed a new contract, which will keep him at the club until the end of the 2016-17 campaign.