Best, 31, has played 143 games for Ulster since his debut in 2004 and he celebrated his 70th Irish cap in the last game against New Zealand.
Ulster's director of rugby David Humphreys described Best as the "cornerstone" of the team.
"You would struggle to find anyone who is more committed," said Humphreys.
"He has represented Ulster for the best part of a decade now and he has achieved some of the highest honours that the game has to offer.
"He will be a key player in our team as we continue to build and improve in the coming years."
Irish Rugby's CEO Philip Browne described Best as a "great servant to Irish rugby over the past 10 years".
He added, "We are delighted to secure his future in Ireland for the next two years".
Best said that the support he had receiving after initially missing out on a place in this year's British & Irish Lions squad had been a "massive factor" in his decision to agree a new Ulster deal.
"That made me feel very special and underlined to me that Ulster is more than a team, it is a community and a rugby family".
"I want to keep playing for Ireland for as long as I can and to try and win a few more things in the green jersey."
See what the fans have to say
[/tag]