Casteels has established himself as Hoffenheim's number one, starting all of the club’s Bundesliga games this season.
The 21-year-old is also hoping to gain a place in Belgium's World Cup squad, having been called into Marc Wilmots' squad on several occasions this year.
He will now remain with Hoffenheim until 2017, while understudy Grahl has penned a two-year extension that keeps him contracted until 2016.
The duo follow teenage defender Niklas Sule, who signed a new deal, in committing their futures to Hoffenheim.
Markus Gisdol's side sit 12th in the Bundesliga, but have won only one of their last six games.
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