The 33-year-old had been linked with a move away over the summer, but has now put pen to paper to end speculation linking him with a switch to Bayern Munich or Malaga.
Lucio moved to Inter ahead of the 2009-10 season, in which he helped them to win a historic treble of Serie A, the Coppa Italia and the Champions League.
He was also a key player last season, playing a part in Inter’s second place league finish and Coppa Italia triumph.