The DR Congo international has been a key player for the Baggies since joining from Paris Saint-Germain in 2009 and has been rewarded with a new and improved deal.
"This is good news for everyone connected with West Bromwich Albion," said manager Steve Clarke.
"Youssouf is a talented player and the fact he is willing to sign a contract extension shows we're doing the right thing as a club.
"Youssouf is an important player for the group - the number of games he's played in the past few seasons underlines this fact.
"The really pleasing thing is that Youssouf should now be coming into his best years as a footballer and will hopefully spend them here."
Mulumbu had 12 months to run on his previous deal, plus a year's option in the club's favour.
The 26-year-old played a crucial role during West Brom's automatic promotion success from the Championship in 2010 and capped his first season in the Premier League by winning both the fans' and players' player of the season awards.
Sporting and technical director Richard Garlick said: "This continues our policy of rewarding players for the progress they make at the club and we're delighted Youssouf has put pen to paper.
"I'm sure the news will be well received by all of our supporters, who fully understand his value to the team.
"Youssouf is integral to the dressing room and has developed over the past four-and-a-half years into a player who performs at a consistently high level in the Premier League."