The 34-year-old former Wales international has made over 100 first-team appearances during his six seasons at the Cherry and Whites, and has been an important figure so far this term with Alex Brown injured and Jim Hamilton away on World Cup duty with Scotland.
James said in a Gloucester statement: "I'm delighted. It's good for me that I've got this year and next year and can just concentrate on the rugby. I'm over the moon.
"Some guys are quite laid back about it when they're in a contract year but, personally, I don't like to worry about these things and risk have it affect my performance on the pitch. I'm glad it's out of the way and it's a weight off my mind."
Gilbert has released a new line of rugby cleats. The Gilbert Virtuo 8S is part of the exciting new product. Check it out.
The Barbarians are one of the top invitational rugby sides with a long history and classic rugby jersey.
The Nike Tiempo is a solid rugby cleat and one of few styles still made from full-grain natural leather.
The Lions get ready for their matches with this green training jersey. It's what the players wear. Get in the Gear!
A cool looking all black rugby cleat with the high performance adidas is known for. Get in the Gear!
Wear the crest of the British and Irish Lions on your t-shirt. A great look for the summer.
The Lions are ready to get their Australia tour underway. They arrive in Perth on Monday.
The New Zealand All Blacks training jersey for 2013/14. Get in the Gear!
The USA Rugby Pro Alternate rugby jersey is perfect for any fan of the Eagles. Get yours to wear during the summer Test matches.
The NEW All Blacks 2013/14 jersey has arrived at World Rugby Shop. Dare to wear the colors of the All Blacks.