The news comes ahead of Saturday's crucial match against the Dragons at Scotstoun and on the back of Friday night's bonus-point win over Zebre, a performance that included 10 points from Horne and a cross-field kick assist for DTH van der Merwe's try.
Formerly of Howe of Fife, Horne made his Glasgow Warriors debut against Ulster in 2009, and has since gone on to be a lynchpin in the club's midfield.
His appearance on Friday night took his tally of club appearances to 166, behind only Chris Fusaro, Graeme Morrison and Harley on the all-time club caps list.
A shrewd operator at both centre and fly-half, Horne has registered 400 points for the club in his outings to date - a tally including 24 tries.
Perhaps his most famous score came against Northampton Saints at Scotstoun in the 2012/13 Heineken Champions Cup, an injury-time effort from halfway securing the victory in front of a rapturous East Stand.
The midfielder has also represented his country with distinction; his tally of 45 caps to date includes appearances at both the 2015 and 2019 Rugby World Cups, and the 53 points he has scored for Scotland includes a try against Australia in the quarter-final in England five years ago.
Speaking to glasgowwarriors.org, Horne expressed his delight at extending his stay with the club.
"I'm really happy to be staying," he said.
"Glasgow has a special place in my heart. I've been here for 11 seasons now, and I've been part of the journey to get where we are today. I'm really pleased to sign up for another two years.
"This club is home to me. To be able to come in every day, see your best mates and then go out and play alongside them is a special feeling.
"I spoke to Danny (Wilson) a lot - I've had a good dialogue with him over the course of the season. He's got a great vision for the club and how he wants us to keep progressing, and it's something I want to be part of."
Glasgow Warriors assistant coach Kenny Murray added: "Pete's been a fantastic servant to the club. He's a real leader on and off the pitch - he brings a lot of attention to detail to his game, and he's also a guy who drives standards within the squad.
"On the pitch, he's an incredibly committed individual. He'll put his heart and soul into every performance. He's a real asset to the team - the fact he can play both 10 and 12 makes him a particularly valuable member of our squad. It's great for us to be keeping him for another two seasons."