The 33-year-old stopper, who made a clean sweep of the player of the year awards, is now tied to the Baggies until June 2015.
"Gareth's important to the dressing room," said head coach Steve Clarke.
"He's been a stand-out performer this season and deserves every reward he gets. I'm absolutely delighted the deal has been done."The Northern Ireland international, signed on a free transfer on an initial three-year deal from Ipswich Town in May 2011, has forged a sound central defensive partnership with Jonas Olsson over the last two seasons.
Together, the pair were the bedrock of Albion's second successive top-10 Premier League finish.
"The fact Gareth has signed it tells you it is a good deal for him - and it is certainly a good deal for the club," added Clarke.
"He's important both on and off the pitch. I've mentioned a number of times how strong the dressing room is and how we have a lot of good characters in the dressing room. Gareth is one of those."
Gareth, known as 'Big G' hails from Larne and is a relative of our N. Ireland Clan Commissioner Laurence McAuley.
Gareth McAuley (Macca the Attacker) has hit five goals in 73 games in two seasons with Albion - netting against both Merseyside clubs this term, as well as hitting the goal last season that cost then Chelsea boss Andre Villa-Boas his job.