The 34-year-old was a free agent after his previous deal with Albion expired at the end of June, but he has decided to extend his stay at The Hawthorns.
Gera has not played for the Baggies since January due to a serious knee injury but is set to return to training later this month with a target of early October for his first-team comeback.
Albion manager Steve Clarke told the club's official website: "It's great to have Zoltan on board for another season. He's a top professional and good within the group.
"I believe his form last season before his injury was as good as at any time in his career and our main aim is to get him back to that level as quickly as possible.
"If he reaches that level again, he will be a great asset for us."
Gera initially joined West Brom from Ferencvaros in July 2004 but then departed to Fulham for three years before returning to The Hawthorns in August 2011 on a two-year contract.
He has made 176 appearances in all competitions for the Baggies and scored 29 goals.
West Brom's sporting and technical director Richard Garlick added: "I'm delighted we've managed to agree a deal that suits all parties.
"It's been well documented that Zoltan has had rotten luck with injuries over the past couple of years but when he has played he has been different class. The amount of goals and assists he provided last season underlines this.
"He has worked extremely hard to get himself fit and we're looking forward to seeing him pull on an Albion shirt again in the near future."