General manager Sam Presti announced the new deal Tuesday but did not disclose the terms.
Collison has spent his entire career with the franchise since being drafted 12th overall in 2003 by the Seattle SuperSonics, who later relocated to Oklahoma City. Collison, Kevin Durant and Jeff Green are the only three players left with the team from its time in Seattle.
Collison was a part-time starter for three seasons and is now the Thunder's backup center. He has averaged 7.7 points and 6.6 rebounds in his career.
Presti praised him for bringing a "smart, physical and hardworking approach" to Oklahoma City's defense.