Laich, who was set to become an unrestricted free agent July 1, finished fourth on Washington in points (48), fifth in goals (16) and third in assists (32) last season while posting a plus-14 rating.
According to several reports, the contract is worth $27 million, with a $4.5 million cap hit.
"I'm thrilled to make the commitment to remain a Capital," Laich said in a statement released by the team. "It is a wonderful organization with terrific fans and I'm very happy to continue to call Washington home for many years to come."
The 6-foot-2, 200-pound center has been with the organization for the last seven seasons, and has played in all 82 games in three of the last four campaigns. In addition, the 28-year-old finished the 2010-11 campaign fifth on the team in hits (113) and won 51.3 percent of his faceoffs. Laich was second on the team in points during the playoffs (7) while leading the Caps with six postseason assists in nine games.
During the regular season, Laich finished first among Capitals forwards in shorthanded ice time per game. Washington's penalty kill ranked second in the NHL during the regular season.
"We are very pleased to have Brooks Laich continue his career as a Washington Capital," GM George McPhee said in a statement. "Brooks has excelled as one of the League's finer two-way players and is just entering his prime. His combination of size, speed, versatility and leadership makes him a valuable part of our club."