The Mexican driver joined Red Bull at the end of 2020 and went on to enjoy his most successful F1 season, finishing fourth in the overall 2021 driver's championship.
The announcement comes just days after Pérez, affectionately known as "Checo," won the Monaco Grand Prix on Sunday ahead of Carlos Sainz and teammate Max Verstappen, who finished third.
Commenting on the contract extension, team principal and CEO Christian Horner said: "Since joining Oracle Red Bull Racing, Checo has done a fantastic job.
"Time and again he has proved himself to not only be a magnificent team player but as his level of comfort has grown he has become a real force to be reckoned with at the sharp end of the grid."
The 32-year-old currently sits third in the driver's championship having amassed 110 points and four podium finishes just seven races into the season. Ahead of him are Verstappen and Ferrari driver Charles Leclerc.
The F1 season resumes with the Azerbaijan Grand Prix on June 12.