The 42-times capped Sweden international joined the Magpies from Amiens in the summer of 2019 and endured some challenging times during the first two years of his stay on Tyneside.
But Krafth showed significant improvement following the appointment of current Magpies manager Eddie Howe last year and put in a number of impressive displays as United hauled themselves away from the relegation zone to secure a mid-table finish.
The 27-year-old’s current deal was set to expire next summer but he has now agreed to extend his stay on Tyneside by a further year.
After putting pen-to-paper, the Swede told NUFC TV: “I'm very, very happy to extend my contract here - me and my family love to live here - and continue with the journey we started with the club.
“I'm really looking forward to the future at the club.”
Krafth made 16 appearances under Howe after the former Bournemouth manager was named as successor to Steve Bruce in November.
The current Magpies boss praised Krafth for the ‘excellent contribution’ he made during the second half of the campaign.
He said: “I'm very pleased Emil has extended his stay with us. He made an excellent contribution to the team last season and he continues to add valuable strength to us.”
Krafth has appeared in all of United’s pre-season fixtures so far and will be expected to continue that record when they face Benfica at Estadio da Luz on Tuesday night.