The 28-year-old right-back joined Bremen from Slovan Liberec in 2012 and has gone on to make 69 Bundesliga appearances.
Gebre Selassie had less than 18 months left to run on his current deal and the extension ties him to the club until June 2018.
And sporting director Thomas Eichin was relieved to secure the long-term future of the Czech Republic full-back.
"Theo is a very important player for us and an extraordinary person who commands great confidence within the team," Eichin told Bremen's official website.
"The early extension of the contract is another building block on the Werder road, which we have successfully embarked. We are pleased to work together with Theo for a long time."
Gebre Selassie added: "Since my first day in Bremen and at the club I have felt very well.
"The last few months have shown that we have made good development. I am still a part of the team and together with the fans and everyone here at the club I hope to continue on this path."
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