“I’m tremendously proud to sign for this great Club again,” Kasper told lcfc.com.
“Leicester has felt like home since the day I arrived three years ago and always felt like the right choice for me. I was always confident that my future would be sorted once we achieved our objective of winning promotion to the Premier League and I’d like to thank the owners and the manager for making it happen.
“I can’t wait to play for this Club in the Premier League. With the management team we have and the squad already here plus new additions arriving, we’ve got a great chance of having a great season.”
City’s Danish international goalkeeper was in inspired form for Nigel Pearson’s side during the 2013/14 season, as the Foxes stormed to the Football League Championship title with a record 102 points.
The 27-year-old was an ever-present in the side, playing every minute of all 46 league fixtures, conceding just 43 goals – a defensive record only bettered by Burnley and Brighton.
Schmeichel’s standout performances saw him named in the PFA Championship Team of the Season for the second consecutive campaign – fitting recognition for a goalkeeper widely considered to be the best outside of the Premier League prior to City’s promotion to the top flight.
City manager Nigel Pearson said: "I'm delighted that Kasper will be staying with us; it's terrific news for our Club and fully deserved recognition for his application and consistency, certainly during my time here.
"Kasper has been as driven as anyone to help take this Club back to the Premier League and now that we have achieved that, he fully deserves the opportunity to play at that level.
"A player of his quality will have had a number of options available to him, but he wants to remain part of what we're doing at Leicester, which says a lot for where we're going as a Football Club."
Aside from his eye-catching saves, Schmeichel proved to be equally effective in the pursuit of goals for the Foxes last season, with his quick thinking and distribution leading to a number of goals on the counter attack. His memorable stoppage time header against Yeovil Town in March even helped to salvage City’s unbeaten record at a key stage of the season.
Since his arrival from Leeds United on a free transfer in June 2011, Schmeichel has established himself as a key figure in the City squad, and having made over 150 appearances for the Foxes is undoubtedly one of the best goalkeepers seen at King Power Stadium in recent years.
A Manchester City youth product, Schmeichel has also had spells with Darlington, Bury, Falkirk, Cardiff City, Coventry City and Notts County during his career, totally more than 300 appearances.
Following those loan stints at Darlington and Falkirk at the start of his career, Schmeichel made the first of eight Premier League appearances for Manchester City in August 2007 in a 2-0 win away at West Ham United, after which came another two clean sheets in 1-0 wins at home to Derby County and Manchester United.
The 2011/12 Leicester City Player of the Year and Players’ Player of the Year made his debut for the Denmark national team in February 2013 against Macedonia. Another cap against Malta followed before he almost single-handedly kept England at bay in a 1-0 friendly defeat at Wembley in March.