The 27-year-old is the top try-scorer in the Premiership this season with 13, including a 13-minute hat-trick in last Saturday's 71-7 win over Mogliano in the Amlin Challenge Cup.
"I am really excited to be here for the next few years," said Varndell, who is just five tries behind all-time Premiership leading scorers Steve Hanley and Mark Cueto, who both have 75.
"Now, things are looking up, and we've got a fantastic squad of players who I believe can really achieve something together in the coming seasons.
"You only have to look around you at some of the young talent we have coming through and some of the experience that (rugby director) Dai Young has organised around that, to get excited about what is to come.
"I am loving my rugby this season, and the type of rugby that we are playing at Wasps is fantastic when you are a winger."
London Wasps Director of Rugby Dai Young added: "Tom has played a big part in our improvement this season and his finishing is second to none. I am really pleased he's going to be a Wasps player for the foreseeable future."
Varndell has scored 49 tries in 89 appearances for Wasps since joining them from Leicester in 2009.
Gilbert has released a new line of rugby cleats. The Gilbert Virtuo 8S is part of the exciting new product. Check it out.
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The Nike Tiempo is a solid rugby cleat and one of few styles still made from full-grain natural leather.
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Wear the crest of the British and Irish Lions on your t-shirt. A great look for the summer.
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