The 30-year-old Moroccan was set to see his deal expire this summer but is now tied down at Molineux for another 12 months.
An automatic extension has been triggered thanks to being a regular presence in Nuno Espirito Santo's side this campaign, making 20 appearances in the Premier League – all of those starts.
It means Saiss, who has played in both defence and midfield for Wolves, is set to carry on being a valuable member of the squad into the 2021/22 campaign.
Saiss is already one of the club's longest-serving current players, having joined from French outfit Angers in the summer of 2016 for around £3million, and has featured 167 times in total.
Only captain and defensive partner Conor Coady has been at Wolves for longer than him, having been snapped up in the summer of 2015.
Originally signed as a midfielder, Saiss played 25 games in his first season under both Walter Zenga and Paul Lambert.
He was then an integral part of the Championship-winning team under Nuno as the main midfield partner of Ruben Neves, making 44 appearances, and has since gone on to help Wolves reach the FA Cup semi-finals, Europa League quarter-finals and achieve back-to-back seventh-place finishes in the top flight.
Over the past couple of seasons, Saiss has transitioned into a centre-back – also impressing there for Morocco – and brushed up on his disciplinary record.
He has had just two yellow cards in 20/21, after a notable 39 across his previous four league campaigns.
Saiss's extension means second-choice goalkeeper John Ruddy is now the only first-team squad member whose deal runs out at the end of the term.