The versatile 31-year-old, who can play in defence and midfield, moved to the Allianz Riviera in September 2013 after finding his opportunities at former club Paris Saint-Germain limited.
Bodmer has proved a popular figure at Nice and has made 35 Ligue 1 appearances during his time at the club.
Subsequently, he has been rewarded with a new deal that runs until June 2017.
"We have a common goal," Bodmer told Nice's website. "This allows me to take part in an interesting project where I can flourish within a group that is certainly young but which has many qualities.
"My goal is to keep competing over the next two and a half seasons and to take the maximum from it."
Nice president Jean-Pierre Rivere was thrilled that Bodmer had opted to commit his future to the club.
"In our project we need players like him to surround our youth," he commented. "We are very happy that Mathieu believes in our project and wishes to participate in the continuation of this adventure."