The 32-year-old centre-back was previously set to become a free agent at the end of the current season, but his new deal ensures his leadership and experience will remain a key part of the Toffees' backline for years to come.
Tarkowski, who often captains the side when Seamus Coleman is unavailable, has been a consistent figure in Everton's defence since arriving from Burnley.
Since joining from Burnley, Tarkowski has earned praise for his reliability, aerial strength, and commanding presence at the heart of defence.
His commitment to the club comes at a crucial time as Everton continue to build stability both on and off the pitch.
"I'm super excited and proud to be an Everton player and to continue this journey," said Tarkowski, via the club's official website.
"It's been a crazy few years with some big lows and some massive highs. We've managed to get through those tough times and hopefully now we're on to more positive and exciting times ahead.
"I think the intention has been set out from the start of this season.
"I've loved every minute so far of working under the manager. He has made it clear where we're going with this club. The results and performances have really improved in his time here and it does seem to be going in one direction."