The 30-year-old would have seen his previous deal expire at the end of this month.
Gross made 29 Premier League appearances last season as Brighton achieved their highest ever position in the top flight with a ninth place finish.
He joined Brighton from Ingolstadt in the summer of 2017 and has scored 17 goals in 170 appearances for the Seagulls.
Brighton boss Graham Potter told the club website: “I am delighted for Pascal and the club that he’s now signed.
“He has been a key player throughout the club’s time in the Premier League and for me during my time as head coach.
“He is an excellent professional on and off the pitch.
“As one of our senior players in the dressing room, he’s a great example to any young player, and he showed again this season that he is an important member of the squad and key player for us on the pitch.”
Brighton are also hoping to extend the contract of Danny Welbeck, with the former Manchester United and Arsenal striker's deal expiring later this month.
