The 30-year-old joined the Hatters while they were still in League Two six years ago, and has since helped them to three promotion-winning campaigns.
The latest of those saw Luton clinch a place in the Premier League for the first time since the rebranding of the top flight, beating Coventry City in the playoff final at Wembley last month.
Berry featured as a substitute in that match, scoring in the penalty shootout, and now has 24 goals in 164 appearances for the club across all competitions.
While Luton have not confirmed the length of the new deal, Berry's previous contract had been due to expire at the end of this month, so the extension will see the midfielder feature in a fourth different division since moving to Kenilworth Road.
"That was the best achievement of my career, and to do it at Wembley with this group of players made it even more sweeter. It was the best day of my career by a mile," he told the club's official website.
"It didn't properly sink in until I saw the badges, and who we were playing. Our badge was in the mix with all the Liverpools, Man Uniteds and Chelseas, and when you look at that and think, what an achievement we've made to be amongst the big teams like that. Now we've got to try and stay there with them.
"It's great to sign a new contract. I've said it in previous interviews but I love playing for the club, I love playing at the Kenny, and long may it continue with all the success we've had previously. Hopefully there is more to come.
"Since [manager] Rob [Edwards] came in, he's been brilliant with me personally, and along with Richie and Trolls they've had a real impact on the squad. They've not transformed it from what was happening previously, but have changed a few bits that have really made us a better team, and that showed in the second half of the season.
"I can't wait to get back to work now. It's all about getting pre-season done, having a really good camp and being ready for the season ahead. It's going to be a good test just to see where we are at, and I feel like we can cause a few problems."
Luton boss Rob Edwards added: "I'm delighted to get Luke signed on again. He is someone who has just grown on me and grown on me the more we've been here. He knows this as well. He's just got better and better.
"His availability for us has been brilliant and from his last-minute equaliser against Millwall, which was a really good goal, to his penalty in the play-off final, I think he's just shown real moments of quality.
"When he came on early for Pelly up at Sheffield United, I thought he was outstanding and he backed that up against Bristol City, then away at Sunderland as well. He's just performed really well, whenever we've asked him to, and he's a really valuable member of the squad.
"Not only that, he knows the club inside out and we've got to stay true to ourselves, we have to keep that heartbeat, keep that core of people who have helped us get to where we've got to.
"These lads who have won several promotions with us, they are special and we've got to celebrate that. He thoroughly deserves to get a crack in the Premier League and I love him to bits. He's class, a brilliant man who brings so much to the club."
Luton will reconvene for pre-season training next month before beginning their maiden Premier League campaign away to Europa League-bound Brighton & Hove Albion on August 12.