The 28-year-old said he rejected offers from overseas to help New Zealand defend the trophy.
The 28-year-old said he rejected offers from overseas to help New Zealand defend the trophy and add to his 90-cap Test record.
"Whilst there was considerable interest internationally, I felt I wasn't ready to give up playing with the best players in the game," he said in a statement.
"I also believe that I haven't reached my full potential yet and don't want to leave until I feel I have."
Franks made his Test debut in 2009 and has missed only 15 internationals since then, becoming a mainstay in the front row for New Zealand's 2011 and 2015 World Cup wins.
Under the deal, Franks will also remain with the Canterbury Crusaders Super Rugby club.