The midfielder joined Freiburg in 2008, and has chosen to remain in the Bundesliga despite reported interest from Real Betis in Spain.
Schuster has made made 164 appearances for Freiburg, scoring 14 goals, and was instrumental as the club reached the semi-finals of the DFB-Pokal last season.
Sporting director Jochen Saier hailed the 28-year-old's decision to pen a new deal, which reportedly runs until June 2016, telling the club's official website: "It's great that Julian Schuster declares his support of the club by extending his contract."
Saier added: "He has made great development with us and is a good role model.
"We are extremely happy that our captain will continue to help us with his experience and has decided to remain."
Schuster said: "I am pleased that we have once again reached an agreement. I have experienced five-and-a-half great years in Freiburg; I am proud to play here."
Freiburg have endured a disappointing Bundesliga campaign this term and sit 16th in the table, a point from safety.
