The 28-year-old, who signed in the summer from St Etienne, made just 14 Premier League appearances for the Cherries last season after a six-month lay-off with a cruciate knee ligament injury.
Gradel had an initial spell on the south coast on loan from Leicester back in 2007 and chief executive Neill Blake is pleased to see the Ivory Coast international extend his stay.
Blake told the club's official website: "We are delighted to secure Max's future with us.
"He is a player we know well and a player that has done great things for this club over the years.
"As a club we are constantly looking to strive forward and Max shares that philosophy with us
He's an exciting player and one that is very much in our long-term plans."
Source : PA