The 33-year-old had one year remaining on his previous contract and has opted to renew for another year, after having arrived at the club from Charlton Athletic in 2011.
Francis has featured in 286 outings for The Cherries since then, and was a crucial member of the squad that guided the club to the English Premier League for the first time in 2015.
The defender was also a vital component of the team this season, having featured in all but six top-flight fixtures and led the club to a very respectable 12th-place finish.
He told the official club website: ''It all happened fairly quickly because negotiations don't take too long when a player wants to stay at the club. I'm delighted to sign a new deal and am really looking forward to the next two years.''
''The most important thing was to retain our Premier League status for another year and then once that was achieved it was a chance to sit down and discuss things.''
Francis concluded: ''The club have been great with me ever since I arrived. I feel I've performed to my best over the past seven years and feel very proud to be part of such a successful squad.''