The centre-back has been at the club since 2005 and his deal was due to expire at the end of the season.
Knoche, 24, believes the Volkswagen Arena is the best place to continue his development.
“I grew up here at VfL Wolfsburg, which makes me all the happier that VfL are placing their trust in me,” he said. “Here I have the best possible conditions to develop further.
“I will continue to work hard to help the team quickly get back on track and begin playing the sort of successful football which we have become used to in recent years.”
Knoche has made nine Bundesliga appearances for Wolfsburg this season, with Valerien Ismael’s side 13th in the table.
