"We are extremely pleased to have strengthened our commitment with Fraser, who has been an integral part of our team over the past three seasons," vice chairman Les Reed told the club's website.
"He has already established himself as one of the leading keepers in the Premier League and, at 29, we believe he still has his best years ahead of him, not just for us but also the national team."
Forster, who played in all of Southampton's league games last season, described his decision to extend as a "no-brainer".
"I'm delighted. I have absolutely loved my time here at Southampton so far, and when the opportunity came along to extend it I didn't think twice about it," he added.
(Reporting by Simon Jennings in Bengaluru; Editing by Hugh Lawson)
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