The 37-year-old has put pent to paper on a new two-year deal with the Hornets, as announced on the Premier League club’s official website.
This means that Foster will be at Vicarage Road until the summer of 2022.
The English goalkeeper has been on the books of Watford since the summer of 2018 when he joined from West Bromwich Albion for a transfer fee of 2.5 million pounds.
The former Manchester United goalkeeper played in all 38 Premier League matches for Watford last season, and has featured in 29 league fixtures for the Hornets so far this campaign.
Foster was also on loan at Watford in 2005-06 and 2006-07 from Premier League giants United.
The Premier League was suspended in mid-March due to the coronavirus pandemic, but the top flight of English football is scheduled to resume next week.
Nigel Pearson’s side will return to action on June 20 when they take on Leicester City at Vicarage Road in the league.
Watford are 17th in the Premier League table at the moment with 27 points from 29 matches, level on points with third-from-bottom Bournemouth.