The 25-year-old, who was named captain between 2010 and 2012, is now closing on a century of appearances for Warriors and has already scored 15 tries for the club.
Worcester born-and-bred, Pennell, who represented England at Under-19 level, has been in fantastic form this season and has appeared in 16 games, including all 13 in the Aviva Premiership.
"I have seen a lot of change at the club during my time here," said Pennell. "There have been lots of different coaches, new set-ups and even different leagues to play in. But the direction of the club at this time is what makes me want to stay here.
"Not only on the pitch but also away from it too, the route the club is taking is an exciting one and one I really want to be a part of.
"It has always meant a great deal to me to play for the Warriors and my hometown club. We have already made some strong additions to the squad as we now start to plan for the future and I'm sure there are many more to come.
"I've been pleased with my form this season but I feel there is so much more I can give," he added.
"I want to play to what I feel is my true potential and by signing this new contract I feel I can now do that at Warriors."