The 26-year-old batsman made his first team debut in 2007 and has scored almost 5000 first class runs, including eight centuries, as well as over 2,800 runs in List A cricket and more than 2100 in Twenty20.
He has also claimed 297 catches and eight stumpings in first class cricket.
Kieswetter said: “I am absolutely over the moon for this opportunity to be able to commit myself further to SCCC.
“From the very beginning of my career the Club has helped and guided me to achieve levels of performance I am proud of.
"Throughout every corner of the county there are people passionate about the club, and so to be able to be part of something that has such a loyal following it's extremely humbling.
“I have had plenty of ups and downs throughout my professional and international career, but there is always one factor that remains a complete positive for me - and that is being part of this Club.
“I love playing for Somerset. It's my home and I am so excited about the next three years. I believe there is a lot exciting talent coming through and I'm looking forward to helping develop the personnel and the club to even higher success.”
Dave Nosworthy the Somerset Director of Cricket said: “With the amount of ability and the track record that Craig has, any team would be delighted to have signed him - and so naturally so are we.
“Craig is one of the more naturally talented players around who has the ability to turn a game on its head, both with bat in hand and with the gloves.
"He is a natural striker of the ball who in my mind still has much more ability which we have not yet even seen.
"He is a quality wicket keeper with added agility, and is also a member of the team who shows some leadership traits.
Nosworthy added: “The new deal is good news for the Club and I am sure that like us he will be very pleased to be able to continue his prolific career here at the County Ground."