The winger is now tied to the Premier League club until 2019, while the deal could be extended for a further year if he makes a certain number of appearances.
Routledge has played in 204 games, scoring 20 goals, since joining the Swans from Newcastle United in 2011.
The 32-year-old said of his new deal: “The club wanted me to stay here and I wanted to commit myself further. It was a no-brainer.
“There was recent interest from other clubs, but for me there wasn’t really a decision to be made about my future here.