"Real Madrid and Benzema have agreed to extend the contract of the player, who will remain tied to the club until June 30, 2021," Madrid said in a statement.
Vice-captain Marcelo, Isco and Dani Carvajal have all extended their contracts until 2022 over the past week as the club hierarchy continues to reward key players who enabled Madrid to become the first team to retain the Champions League trophy since the competition changed its format from the European Cup in 1995.
Benzema, 29, is sidelined by a hamstring injury that is expected to keep him out for another month.
Since joining Madrid from Lyon in 2009, Benzema has won 14 trophies, including three Champions League and two La Liga titles.
Zidane has orchestrated seven of those successes. The 45-year-old took over from Rafael Benitez in January 2016 on a deal until the end of the 2018 season.
During the Frenchman's 21 months at the helm, Madrid have won the Uefa Champions League twice as well as the 2017 La Liga crown - their first since 2012.
The 2016 Club World Cup has been added to the trophy cabinet along with two European Super Cups and the 2017 Spanish Super Cup.
Madrid have stuttered at start of the defence of their domestic title with two wins and two draws. Already seven points adrift of arch rivals Barcelona, on Wednesday they entertain Real Betis
However Madrid will be able to call on the services of the Portugal international Cristiano Ronaldo. The 32-year-old is available for selection after serving a five match ban for pushing the referee following his dismissal in the 3-1 Spanish Super Cup win over Barcelona on 13 August.