Brandt's previous deal would have expired in the summer of 2024.
After a few patchy years at the Signal Iduna Park, Brandt has really come into his own over the last 18 months.
The 26-year-old's improvement has been evidenced by the fact that Brandt was voted the Bundesliga's player of the month in January and February this year.
Brandt joined Dortmund from Bayer Leverkusen in the summer of 2019 and has made 162 appearances, scoring 29 goals and providing 30 assists.
Speaking in a club statement, Brandt said: "Even after four years, I still have a lot of fun every single day being part of this very team, standing on the pitch with these guys and playing football for this highly emotional club with its extraordinary fans.
"To be honest, the feeling of being in the right place at the right time has always been the most important point in my sporting life.
"And that won't change either. I'm looking forward to the next few years in black and yellow and I'm sure we'll have the opportunity to celebrate something big together."
The Germany international has won one DFB-Pokal with Dortmund and will be looking to add the Bundesliga title this season.
