"Real Madrid and Benzema have agreed to extend the contract of the player, who will remain tied to the club until June 30, 2021," Madrid said in a statement.
Vice-captain Marcelo, Isco and Dani Carvajal all extended to 2022 over the past week as Real reward key members of the squad that became the first side to retain the Champions League trophy in June.
Coach Zinedine Zidane's renewal is also imminent after the Frenchman repeated on Tuesday that his deal is "done".
The 29-year-old has won 14 trophies, including three Champions League and two La Liga titles, since joining Real from Lyon as one of Europe's most promising strikers in 2009.
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The Frenchman's eight-year stint at the Santiago Bernabeu has been filled with highs and lows.
Jose Mourinho complained of his meek nature claiming he wanted a "hunter" whilst describing Benzema as a "cat" when Real boss, and Benzema has often found himself whistled by the demanding Bernabeu crowd for his lack of killer instinct.
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However, it is his unselfish play that has seen him form a perfect partnership with Cristiano Ronaldo and see off the challenge of Gonzalo Higuain and Alvaro Morata among others to be Madrid's number nine.
"Morata plays so little under Zidane because Benzema is the best striker to play with Cristiano," another of Benzema's former Madrid coaches Carlo Ancelotti told Italian newspaper Corriere della Sera before June's Champions League final.
His 181 Madrid goals at just under a goal every two games is the eighth best in the club's history and just one off club legend and six-time European Cup winner Paco Gento.
The Champions League is where Benzema has most consistently shone as his record of 51 goals in the competition is only bettered by Ronaldo, Lionel Messi, Raul and Ruud van Nistelrooy, excluding the qualifying rounds.
Benzema has been ostracised by France at international level since 2015 due to his alleged role in a sex-tape plot aimed at blackmailing former international teammate Mathieu Valbuena.
That faith has been rewarded on the field as Benzema was a pillar of Real's first La Liga and European Cup double last season for 59 years -- scoring the goal that sealed the league title at Malaga on the final day of the season.
"For me, he's one of the best strikers in the world," said Zidane last month.
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