The deal means the 38-year-old is set to play in a 22nd season for the Old Trafford club, for whom he made his debut in March 1991.
In that time he has made a club record 898 appearances, scoring 162 goals, and won 12 Premier League titles, four FA Cups, three League Cups, two Champions Leagues, one Super Cup, an Intercontinental Cup and a FIFA Club World Cup.
United boss Sir Alex Ferguson said: "Ryan is a marvellous player. In many ways, he epitomises all my teams here at United; he has constantly re-invented himself, adapted to the changing nature of the game and retained that desire and hunger for success.
"In every training session and match, he is the example for others to follow.
"The young players in the dressing room have a great chance to learn from a player who will continue to break records that anyone in the game will find hard to beat."
Former Wales international Giggs said: "When I signed my first contract, I never thought I'd be able to play at United for 22 years but I feel good and I know I can still contribute to keeping the team pushing for honours.
"Winning the Club's 19th title was a great feeling but this club is all about what we do next and I'm really pleased I can be part of that."
Source: PA
Source: PA