The 29-year-old, who has played 48 times for Scotland, has become a firm fans' favourite since arriving on Tyneside from Edinburgh in the summer of 2010.
"Semore Kurdi's vision for the club excites me and that was a key factor in wanting to stay," said Stirling-born Hogg.
"The supporters are really good up here too and they have really driven this club forward. It has been a great feeling to play at Kingston Park in the last few weeks and the fans have been fantastic.
"They can see how improved the performances have been of late and the club is certainly turning a corner."
Falcons boss Gary Gold said: "Ally Hogg brings a lot of quality to the team and his experience from his time in the Scotland set-up is crucial."
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