The renewal promises to keep the French international at the Bernabeu for four more years until the end of the 2020/21 season, which would be his 12th overall with Los Blancos.
Benzema arrived in the Spanish capital from Lyon in 2009 - the same summer that the club twice broke the world transfer record to sign Kaka and then Cristiano Ronaldo.
He had was still only 21 years of age at the time, but had scored 54 goals for Lyon in all competitions in the two seasons that preceded his €35m move.
Benzema has since scored over 180 goals in more than 370 appearances for Real, winning La Liga titles in 2012 and 2017, as well as the Champions League in 2014, 2016 and 2017.
His best personal season in a Real shirt came in 2011/12 when he scored 32 times in 52 games.