Renowned for his work-rate and endurance, Buxton has made 146 appearances in all competitions since his switch to Kingsholm from Newport in 2002-3. Last season, he made 30 appearances in all and has been handed the captain's armband this season, even when Marco Bortolami has been available.
"I have talked lot about guys like Pete being the glue of our side and that is exactly what he is - we are not the same team when he is not in it," said head coach Dean Ryan.
"He has the trust and demands the respect of his team-mates, puts his body on the line in every single game and is the benchmark of consistency we are looking for.
"Pete is a fantastic player and he has shown his versatility and ability to take on extra responsibility by moving into the second row and also as captain - it shows tremendous mental strength and I think every Gloucester supporter should be delighted he has signed a new contract."
Buxton (29) arrived at the club in 2002-3 and his form has been so good that he was named in England's squad for their summer tour to South Africa.
However, a broken hand in the Guinness Premiership final against Leicester put paid to those dreams but he has returned to Gloucester colours in fine form again this season.
"It is always an honour to pull on a Gloucester shirt - it carries with it so much history and tradition that I never wanted to go anywhere else," Buxton said.
"I am a local guy who just likes to get on with his job. I have been around this environment for a few years now and it is very special. Dean and the rest of the coaches are creating something the whole county can be proud of and I want to be involved in it.
"Winning a major competition is our aim and we have made a really good start in the Premiership and Heineken Cup. I want to try and take this club forward and to know my future is secured is a fantastic feeling."