The midfielder is a popular figure at Borussia Park having risen through the youth ranks with the Bundesliga club.
Herrmann made his debut as an 18-year-old in January 2010 and has gone on to make 185 appearances, scoring 35 goals.
"I love it here - it's great fun to play at Borussia and I feel the confidence of the association," he told the club's official website. "I feel at home here."
Sporting director Max Eberl added: "We are very pleased that we were able to bind Patrick to a new contract and that he wants to continue the successful path we have taken together.
"Patrick has developed from a young player and we are happy that he wants to make the next step in his career with us."
Herrmann has been a pivotal figure in a Gladbach side challenging for a UEFA Champions League berth this season, making 24 Bundesliga appearances and scoring eight goals.
‘He instantly popped into our ratings as one of the best U21 midfielders in Europe. The impressive thing is Slot has made him into more of a no.6' Inside Ryan Gravenberch's transformation at Liverpool
‘I don’t think Liverpool would look at Ollie Watkins, a striker isn’t a pressing issue for them – it’s Arsenal who need one’ Former Reds star explains why his old club don’t need an out-and-out forward this summer
