The 26-year-old Japan international has established himself as a star player for the Seagulls since the arrival of head coach Roberto De Zerbi just over a year ago.
Mitoma joined Brighton for around £2.5m from Japanese club Kawasaki Frontale in 2021, and he spent the 2021-22 campaign on loan with Belgian outfit Union SG, where he recorded eight goals and four assists in 29 appearances.
The winger then returned to Brighton for the 2022-23 season and contributed with 10 goals and eight assists in 41 games across all competitions, helping the Seagulls finish sixth in the Premier League and qualify for the Europa League for the first time in their history.
Mitoma remains integral to De Zerbi's first-team plans and has made a bright start to the new campaign, scoring three goals and providing four assists in 11 matches, including a stunning strike against Wolverhampton Wanderers that won the Premier League's Goal of the Month award for August.
The impressive form of Brighton's No.22 is understood to have caught the eye of a plethora of top European clubs in recent months, with Premier League quintet Manchester United, Manchester City, Arsenal, Liverpool and Chelsea having all been credited with an interest.
La Liga giants Real Madrid and Barcelona, as well as Bundesliga champions Bayern Munich, have also been linked with Mitoma, and a recent report claims that Brighton would be willing to entertain offers for the winger, despite his new contract, if their valuation of the player is met.
Nevertheless, Mitoma has decided to commit his future to Brighton, extending his contract by two years until the summer of 2027.
"Ensuring that a player of Kaoru's quality will remain with us for the long term is fantastic news," technical director David Weir told Brighton's official website.
"Kaoru adapted to the Premier League last season and has quickly become one of our most important players.
"His success is also a reflection of the work of the departments that have played a role in his recruitment, helped him gain important experience on loan and ultimately become a big part of Roberto's first team group.
"I have no doubt that our supporters will be delighted with the news."
De Zerbi added: "It's great news. Kaoru is our top player."
Mitoma has become the seventh senior player to extend his contract at Brighton this year after captain Lewis Dunk, Jason Steele, Solly March, Adam Lallana, Evan Ferguson, Joel Veltman and Jeremy Sarmiento.
The 18-cap Japan international, who was named as Most Valuable Player 2022 by the Japan Pro-Footballers Association, is expected to be involved in Brighton's Premier League clash against reigning champions Man City at the Etihad Stadium on Saturday.