The new deal sees the continuation of an all-Italian rider-team project that began last year, when Simoncelli made his debut in the premier class
Simoncelli has impressed with his pace in qualifying this season - taking two poles - but his performances in races have been less eye-catching.
He drew widespread criticism for a clash at this year's French Grand Prix at Le Mans that left factory Honda rider Dani Pedrosa nursing a broken collarbone, while podium finishes have also been hard to come by, with just one to his name ahead of this weekend's Japanese Grand Prix at Motegi.
"To be wearing the colours of Team San Carlo Honda Gresini for another year and riding a Honda RC213V gives me a lot of satisfaction," the 24-year-old said.
"To be kept on as part of project that Honda HRC are so supportive of in collaboration with Team San Carlo Honda Gresini gives me a lot of confidence and all the motivation I need to show that I can be amongst the best in MotoGP again."
Simoncelli had been linked with a move to another outfit for 2012, so team manager Fausto Gresini was delighted to secure his signature for another year.
"I am really happy to announce that Marco will be back with Team San Carlo Honda Gresini in 2012," he said. "Over the past two years together we have been able to appreciate Marco's qualities as a rider, as a man and as an extroverted communicator, which made us keen to continue our collaboration.
"Marco's huge determination will give us all a lot of motivation ahead of what promises to be an exciting new season."