The new deal keeps the Formula One veteran with the Hingham-based marque for a third season, and finally ends continued speculation with regard to his future.
Trulli confirmed just under two months ago he would be staying, but only now has the deal been announced ahead of his home race in Italy.
"I am very pleased we have been able to confirm my contract with Team Lotus has been extended into 2012," said Trulli.
"The challenge I first accepted when I joined the team is becoming more exciting every day, and I am very proud I can keep helping the team take steps forward for at least another year.
"I am now looking forward to the challenges that lie ahead."
Team principal Tony Fernandes believes Trulli, who has started 245 grands prix, believes the 37-year-old still has plenty to offer.
"He has shown in qualifying here just how much pace he has and how he can wring every last drop of performance out of his car," said Fernandes.
"Since day one with us he has brought a level of professionalism, insight and raw speed to our team that has helped accelerate our development on and off track.
"This announcement will give us the benefit of his experience and knowledge into 2012, another very important year in the growth of our team."