The 21-year-old Belgium international joined Chelsea from Genk in 2011 but was immediately allowed to join Atletico on loan, and he has enjoyed two hugely successful years in the Spanish capital.
In 2012 Courtois helped the Rojiblancos win the Europa League and UEFA Super Cup, while last season he won the Copa del Rey and the Zamora Trophy as the goalkeeper with the lowest goals-to-game ratio in the Primera Division after conceding 29 goals in 37 appearances.
Courtois had said earlier this month he was confident of returning to Atletico on another loan, and he is now delighted to have the move confirmed.
"I'm very happy because it's what I was wanting," he told the Atletico website.
"I've always said that next season I wanted to continue at Atletico and compete in a competition as important as the Champions League, having achieved qualification in such a brilliant way.
"I've only thought about continuing to enjoy the incredible fans that we have and I hope that we can continue giving them plenty of joy."
Atletico sporting director Jose Luis Perez Caminero said the club had prioritised securing the services of Courtois for another year.
"The continuity of Thibaut was one of our priorities for this season," he said.
"We are very pleased to have him for another year. He has played almost every game and given us great confidence in his abilities.
"He had said he wanted to stay here so this gives everybody joy."