It looked like Mendy’s time at the King Power Stadium had come to a conclusion at the end of the 2019/2020 season, when his contract run out.
Given the Frenchman made just eight appearances in all competitions last season, it looked like Leicester would part company with the former AS Monaco midfielder for the forthcoming campaign but Mendy will be staying put.
The 28-year-old joined Leicester from French Ligue 1 side Nice in the summer of 2016 but injury disrupted his first season in England and he spent the following season back on loan at the Allianz Riviera stadium.
"I've enjoyed working with Papy since I arrived at Leicester City and the more I’ve seen of him, the more impressed I’ve been, so I'm delighted he's extended his deal with the club as he has an important role to play," Leicester manager Brendan Rodgers said of Mendy.
"To have someone with his experience, quality and maturity is a big boost for us, especially with European football next season.
"He's been first class for me and has played very well every time he’s featured, so I'm delighted that he's committed to continuing to be part of what we're trying to build at Leicester City."
Leicester City will begin their 2020/2021 season away at newly-promoted West Bromwich Albion on September 12.