The versatile Germany international - who can also play in defence - was due to see his contract expire at the end of the season but agreed a new three-year deal on Wednesday.
Former Stuttgart man Trasch has made 16 appearances for Dieter Hecking's side in all competitions this season, with Wolfsburg sitting second in the Bundesliga and in UEFA Europa League and DFB-Pokal contention.
Trasch joins Ricardo Rodriguez and Vieirinha in prolonging his stay with the club this year and told Wolfsburg's official website: "I am delighted about the contract extension.
"VfL is going through a positive development right now and I want to play my part in helping the side to continue along this positive road we have taken."
Coach Hecking added: "Christian is an important player for us. He can be implemented flexibly and increases our defensive qualities.
"As a character he also enriches the team, which makes me all the more happier to be continuing our work together."
