The 32-year-old Ghana international joined Palace initially on loan from Swansea City in the summer of 2018 before signing permanently a year later.
Ayew has made 186 appearances in total for the Eagles and has chalked some memorable milestones at the club.
He won both the Crystal Palace player and goal of the season award in the 2019/2020 campaign.
Ayew also won Palace's player of the month for August.
Chairman Steve Parish said: “Jordan is a fantastic professional, on and off the pitch. His efforts are never less than 100%, and as a result, he provides an outstanding example to his teammates day in, day out.
"I am delighted to see him extend his spell in red and blue yet again.”
After signing the extension, Ayew said: “It feels great. I think everyone knows how much I love this club. I feel immense pride every time I put on the Palace shirt; this club is my home, and signing a new contract shows that.
"Everything about Crystal Palace is special – the fans especially. They are our 12th man. There isn't a fanbase as passionate and supportive as ours in the league; you are always with us from the first minute until the end.
"I'd like to thank the manager – I have so much respect for Roy [Hodgson], he's been so good to me – and Steve Parish and Dougie Freedman. They're always there when you need them. Not forgetting all of staff at the club; we all have a great bond here.
"I hope I can help the club push on up the league. We have a good squad and the belief to achieve something special. I will be giving 100% every week to make sure we go on a good run and start climbing the table."
