This is Dowson's third deal with the club and comes at the end of four years in which he became the first Saint to lift a major domestic trophy and make the step up to full international rugby.
He has played 116 times for the Saints and scored 21 tries for 105 points. But while Dowson has been led a trophy-winning side and been a part of the squad which reached the Heineken Cup final and three successive Aviva Premiership semi-finals, the 31-year-old believes that the best is yet to come at Franklin's Gardens.
"I've become very settled in Northampton since arriving here four years ago," he said. "I've had a great time and made a lot of friends and that's born out by the fact that I want to stay here.
"It is a factor in making a decision whether to stay or not, if you're settled in a place and happy to live there, but the bigger issues at play are the club as a whole, the management, the playing staff and the ambition and supporter base, which has been unbelievable since I've been here.
"You see the guys who we've signed, the guys coming through the Academy system, and the guys who we've re-signed and we've got a strong squad going forward. We've got plenty of things still to prove, silverware we want to win and to try and achieve something as a squad."
Director of rugby Jim Mallinder says that Dowson is an important player within the club's set-up.
"Phil is very much one of our senior players, on and off the field," he commented. "Regardless of whether he is named captain or not he always leads by example and puts in one top quality performance after another.
"His levels of consistency and durability, not to mention his experience at all levels of the game, mean that he will be an important player for us as we continue to build a squad we believe can compete at the top end of every competition we play in next season."
The Saints have also revealed that hooker Ross McMillan has also extended his stay at Franklin's Gardens.