The 31-year-old former Scotland captain has become synonymous with the side since signing in 2006.
It's thought the deal will allow him to represent his hometown team until at least May 2015, with further options to keep playing or move into an ambassadorial role with Scottish Rugby and the Warriors after that.
He has now captained the side for each of the past seven seasons.
Glasgow Warriors head coach Gregor Townsend said: "Al embodies what the Warriors are all about and he will be one of the key drivers of our success in the years to come.
"He is an outstanding leader and ambassador for the club, but it's his on-field performances that have earned him the reward of this contract extension."
Meantime, Scott Johnson was today confirmed as Scotland's interim head coach for the 2013 RBS 6 Nations Championship and the summer tour of South Africa.