Terms were not disclosed, but a source told ESPN the deal is worth $14 million.
Raiders coach Jon Gruden said that Incognito, who will be 37 next season, is a "big part" of the Raiders' foundation moving forward."
"To get Incognito for two more years is big for us," Gruden said Monday in his end-of-season media conference. "He's a leader on this team, he's an excellent player, he has a lot of life in his legs and his body. He has a passion to still keep going. We think he's one of the best interior players in football."
Gruden said that Incognito remaining with Pro Bowl center Rodney Hudson, right guard Gabe Jackson, Pro Bowl right tackle Trent Brown and "Kolton Miller's emergence gives us, I think, an offensive line we can really be excited about."
Incognito missed four games -- the first two of the season serving an NFL-mandated suspension for violating the league's personal conduct policy and the last two with an injured ankle -- and his five blown blocks on 742 snaps this season was the best rate of any lineman with at least 200 snaps, per the Associated Press.
Incognito agreed with an ESPN midseason assessment that his contract was the "best-value" contract on Oakland's roster.
"It's a situation where I wanted to get back in the league and prove myself and come back and play at a high level, and it's going according to plan," he said at the time. "And the hope is the reward, much like [tight end] Darren Waller got on the other end of it [with a multiyear extension]. Hopefully I'll sign a contract and stay with the team for the long term."
Incognito had been out of football since 2017 before signing with the Raiders this year and starting 12 games.
He began the season with a two-game suspension after pleading guilty in Scottsdale, Arizona, to a misdemeanor disorderly conduct charge stemming from an arrest last August.
He played for the Buffalo Bills from 2015 to 2017, appearing in the Pro Bowl each season. The controversial guard was at the center of a 2013 investigation into the bullying of Miami Dolphins teammate Jonathan Martin, which led to a suspension for Incognito, who did not play football during the 2014 season.
ESPN's Jeff Darlington contributed to this report.