The 31-year-old Dutch defender’s current deal was due to expire after he signed a one-year deal last summer.
Loovens fractured a bone in his ankle in training in February and played no further part for the Owls last season.
But following his arrival at Hillsborough under former head coach Stuart Gray in December 2013, initially on a short-term contract, Loovens quickly established himself in the starting line-up.
Gray soon installed him as his skipper and the former Feyenoord, Cardiff and Celtic centre-half formed an impressive partnership with Tom Lees at the heart of defence.
Loovens also had a short spell with Real Zaragoza before heading back to England and has made a total of 54 appearances for Wednesday.