Scotland international McCormack has been the subject of three bids from Middlesbrough during the summer amid uncertainty over his long-term future.
However, McCormack was never looking to leave Elland Road and has offered his gratitude after securing a new deal with the Championship club.
"I'm delighted to sign a new contract with the club," McCormack told the club's official website.
"I've said all along that this club is where I want to be and where I want to play my football. My family are settled here, I love the place, and I'm looking forward to the future now.
"I'd like to thank the manager and the owners for showing faith in me, and I'd like to say a big thank-you to the fans because their support really is something special, and they are what this club is all about."
Leeds boss McDermott is happy to have kept McCormack and expects a positive reception at Saturday's home game against Queens Park Rangers.
McDermott said: "I am delighted that we have managed to come to an agreement with Ross regarding his long-term future at Leeds United Football Club. I'm sure each and every Leeds fan will share my views and Ross will get a fabulous reception tomorrow.
"I would like to very much thank the owners for their support in this. They have turned down three substantial offers for him and have ensured we retain his services in what will be the peak years of his footballing life."
Whites chairman Salah Nooruddin added: "It's great news that we've been able to reach an agreement with Ross regarding his longer-term future.
"We received a number of sizeable offers for the player, but we are delighted to have agreed a new contract that will see Ross remain at Leeds United.
"We are looking to build a future for the football club, and we see Ross very much as part of that future."