The 27-year-old, who can play at stand-off or at centre, will be staying at Scotstoun until at least May 2020.
Peter, who is a product of Howe of Fife, made his debut for the Warriors against Ulster in 2009.
He has gone on to play 106 times and has scored 15 tries and 195 points for the club.
Horne has 23 caps for Scotland, with his first coming against Samoa in 2013 and he featured in all five of Scotlandís matches at the 2015 Rugby World Cup, scoring in the narrow quarter-final defeat to Australia.
His younger brother George is part of the BT Sport Scottish Rugby Academy.
Speaking to glasgowwarriors.org, Peter Horne said: "I've loved my time here and I love the club. I'm passionate about playing my rugby in Glasgow.
"When the club came to me it was a no-brainer. We're going places, which was summed up this year with us making the European Rugby Champions Cup quarter-finals for the first time.
"As soon as we signed up Dave Rennie for next season it made it an easy decision. When his name was mentioned it filled me with excitement as I've watched a lot of Super Rugby and the Chiefs are a great team. He plays a brilliant brand of rugby and it seems like all the players really play for him.
"I'm hungry to get better as a player and all the boys here are hungry to do better. I feel like I've played a big part over the last seven or eight years and it's a journey I want to continue."
Glasgow Warriors head coach Gregor Townsend added: "Peter is one of our hardest working players and epitomises what it means to be a Warrior, setting himself and others high standards in training every day.
"He deals with injuries and takes on new challenges with positive energy, which inspires everyone at the club.
"It's great news that he's staying in Glasgow for another three years."