The Northern Ireland international, who achieved a clean sweep of the Baggies' player-of-the-year awards, has put pen to paper on a new and improved two-year deal.
McAuley, 33, joined West Brom in the summer of 2011 and has formed an impressive partnership with Jonas Olsson in the centre of defence.
Manager Steve Clarke said: "I'm absolutely delighted the deal has been done.
"The fact Gareth has signed it tells you it is a good deal for him - and it is certainly a good deal for the club. He's been a standout performer this season and deserves every reward he gets.
"Gareth's important to the dressing room. I've mentioned a number of times how strong the dressing room is and how we have a lot of good characters in the dressing room. Gareth is one of those.
"He's important to the club and squad - both on and off the pitch."
McAuley and the Baggies will now hope to cap a season in which they have never dropped out of the top 10 with a strong performance against Premier League champions Manchester United on Sunday.