Butters, who tied for fourth place in last season's Brownlow Medal, had been signed until the end of next year.
But the dynamic on-baller has inked a fresh two-year deal tying him to the Power until the end of 2026.
"I'm rapt ... it was an easy decision," Butters said on Monday.
"I have got enormous confidence in where our young group is heading and I'm settled in Adelaide, so in the end it was a pretty straightforward decision.
"This club gave me my opportunity to play the game I love at the highest level and I want to repay their faith.
"I have formed great friendships within the playing group and I'm very close to (coach) Ken (Hinkley) and the coaching group."
Victoria-born Butters, recruited by Port with pick 12 at the 2018 draft, has emerged as among the competition's best midfielders in his 93-game career.
Last season he won the AFL coaches' award and claimed his first club champion medal.
Port's list manager Jason Cripps said re-signing Butters had been a priority.
"We are thrilled ... his last season was exceptional and he leads the way for our young group both on-field and off-field in the way he trains and prepares.
"Zak is a great character and an emerging young leader and we are delighted that Alberton will remain his home."
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