The centre-back made the switch to the Stade Louis II on a temporary basis from Toulouse in the January transfer window.
Abdennour did enough in the six matches he featured in across all competitions to convince the Ligue 1 runners-up to complete a full-time deal.
The 24-year-old is excited to continue plying his trade at a club with an ambitious "project".
"I have already spent five very good months here in Monaco," he told the club's official website.
"I am very proud to be part of this project. The club is ambitious.
"We have returned well to training this week. Serious things start with the first training session in Austria where we are leaving tomorrow."
The Tunisia international started his career with Etoile du Sahel in his homeland.
He sealed a loan deal to Bundesliga side Werder Bremen in January 2010, before moving to Toulouse in July 2011.
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