The Scotland full-back, 30, joined the Warriors in 2009 from London Welsh and has since played more than 100 games.
"I've witnessed huge growth at the club and we're now selling out Scotstoun for the majority of our home games and it's a great place to play rugby," he said.
Meanwhile, 24-year-old full-back Glenn Bryce, who has made 13 appearances, will join Edinburgh in the summer.
He joins team-mate Duncan Weir in switching to the Warriors' Scottish rivals.
Bryce told the Warriors website: "It was a really hard decision to leave Glasgow but I'm hoping to kick on at Edinburgh and play as regularly as possible next season.
"Getting involved during the Rugby World Cup period for Glasgow was a high for me. I've loved my time at the club."
Murchie captained Warriors to a 12-6 win over Leinster on Friday as the defending champions continued their push for a Pro12 play-off place.
He joins Jonny Gray, Finn Russell, Pat MacArthur, Fraser Brown, Alex Allan, Sila Puafisi, Ali Price, Ryan Wilson, Rob Harley and Chris Fusaro in committing his future to Gregor Townsend's team.
"Peter has made a huge contribution to the club over the last seven years, so it's great news that he's staying with us," said the head coach.
"He sets the standard for the squad in how to conduct yourself as a professional and works very hard to improve as a rugby player."

Conciliation service Acas confirmed talks had ended for the day and would continue on Friday.
The RMT told its members to return to work on Wednesday evening as Southern had "agreed to meet.. without the caveat of any preconditions".
Southern said it had arranged some trains on previously closed routes.
Reinstated trains included extra services to Eastbourne, where a four-day air show is being held.
The train operator had warned it was too late to replace the strike timetable on Thursday but said it had arranged additional trains on previously closed routes, including Horsham to Dorking, Eastbourne to Ashford International and Littlehampton to Portsmouth & Southsea.
An amended timetable will be in place on Friday, Southern posted on its website.
Nearly 1,000 services across the Southern network were cancelled on each strike day this week.
The disagreement centres on proposals by Southern operator Govia Thameslink (GTR) to turn conductors into "on-board supervisors", with drivers taking over responsibility for opening and closing carriage doors.
In a letter to RMT general secretary Mick Cash on Monday, GTR warned "change is happening".
It said: "Our plans to implement the new role will commence on 21 August... the window for you to reach agreement with us is closing."
Southern has said it wants the RMT to agree to a list of "exceptional circumstances" when a train could be dispatched from stations with only one member of staff on board.
The union argues guards help prevent passengers becoming trapped in train doors.
But the Rail Safety and Standards Board (RSSB) said there could be potential safety benefits from "the removal of any possible miscommunication, which could exist between driver and guard".
The RSSB said it had analysed safety data and found "no increased risk of harm to passengers" where drivers operate powered doors and follow correct procedures.
In June Mr Cash said the RSSB was funded by the train companies and it was "ludicrous" to regard it as independent.
He said previous RSSB studies questioned the safety of driver-only trains.
Seafront businesses in Sussex have blamed the long-running Southern train dispute for a downturn in tourist trade.
Brighton Pier estimated visitor numbers were down 10% to 30% on last year.
Its managing director Anne Martin told the BBC she believed visitors were reluctant to travel on trains they could not rely on.
Adam Chinnery of the Seafront Business Association in Brighton warned that traders could not afford to miss income in the summer holiday season.
Mr Chinnery, who runs a watersports shop, said: "Cafes, galleries and the traders are losing out and many of the deckchairs are empty.
"We've only got the summertime. They chose this time to make an impact and it's a bit selfish."
Peter Murchie has signed a new one-year contract with Glasgow Warriors, keeping him at Scotstoun until May 2017.
[NEXT_CONCEPT]
Southern has added 89 trains to Thursday's timetable after the RMT union suspended a five-day conductors' strike and agreed to new negotiations.