The 39-year-old winger's deal will tie him to the Old Trafford club until June 2014 and complete his 23rd season as a first-team player.
Former Wales skipper Giggs made his United debut on 2 March 1991 and has scored 168 goals in 931 appearances.
I am feeling good, enjoying my football more than ever and, most importantly, I feel I am making a contribution to the team," said Giggs.
"This is an exciting team to be part of, with great team spirit, and we are again pushing for trophies as we head towards the business end of the season."
