Neville, now 35, is the third old stager to sign a one year extension following Paul Scholes and Ryan Giggs.
Neville has been in fine form of late sparking calls for him to be taken to the World Cup with the England squad.
And Sir Alex Ferguson was delighted that the player had signed.
"He deserves it," said Sir. "His contribution has been fantastic.
"What Gary has achieved after being out of the game for 18 months, in his 30s, is astonishing."