It means the 28-year-old, who has been at the club since 2014, will be extending his stay at Scotstoun until at least May 2019.
The winger, who has already played 49 times for the Warriors, made his international debut against England in 2012.
He has four caps for Scotland and scored a try against France on his third appearance for his country.
Lee also represented Scotland 7s at the Commonwealth Games in Glasgow in 2014 and has played 66 games on the World Rugby Sevens Series.
This season he has made 11 appearances in the GUINNESS PRO12 and has played four times in the European Rugby Champions Cup. He started both victories over Racing 92, as well as the 43-0 win over Leicester Tigers at Welford Road, which saw the Warriors qualify for the quarter-finals for the first time.
Lee becomes the 13th player to sign a new contract at Scotstoun, with Stuart Hogg, Henry Pyrgos, Greg Peterson, Adam Ashe, Tommy Seymour, Tim Swinson, Alex Dunbar, Nick Grigg, Sam Johnson, Rory Hughes, Peter Horne and D'arcy Rae already signed up.
Huw Jones, Oli Kebble and Callum Gibbins will be joining the Warriors next season, while BT Sport Scottish Rugby Academy players Lewis Wynne, Matt Smith and Jamie Bhatti have signed professional contracts.
Speaking to glasgowwarriors.org Lee said: "It's great to get my new contract signed and to know I'll be at Glasgow Warriors for another couple of years.
"It's been a great club for me and it's a club which is ambitious, so I'm pleased to be involved for another two seasons.
"To be in the quarter-finals of the European Rugby Champions Cup is massive. As a player you want to be playing at the highest level, so for me it has been really pleasing to get a good run of games in our Champions Cup matches this season and play a part in helping the club qualify for the knockout stages.
"It's great to see a number of guys commit themselves to the club. It's a brilliant place to be as we have massive aspirations and the club is always pushing forward. So for those guys to stay on and with new guys coming in as well, it continues to be an exciting time for the club.
"Dave Rennie has been a successful coach in Super Rugby and he will bring a fresh look. It's exciting to see what he can bring to the club next season.
"I want to be involved as much as possible and really contribute to what can be a successful team."
Glasgow Warriors head coach Gregor Townsend added: "Lee has played consistently well for the club and is in the best physical shape of his career.
"He had some cracking performances in Europe this season and is one of our hardest working players on and off the field.
"He's an important member of our squad and it's great news that he has decided to extend his stay in Glasgow."