The defender is currently out of action after a cruciate ligament tear but has signed up for an undisclosed period with the Bairns.
His deal was due to end in summer 2017.
Grant was signed by Gary Holt, one of the former Norwich assistant’s final acts as Falkirk manager.
Peter Houston took other contract offers made by the ex-boss off the table, but kept Grant on for further assessment and very quickly pitched him in to first team action.
The defender became a mainstay of the Bairns and played 53 times before picking up an injury at Livingston earlier this year. Incredibly he played through the pain barrier – despite the serious nature of the damage in his knee – at Ibrox against Rangers before finally going under the surgeon’s knife and starting his early rehabilitation at Fulham where his father, also Peter, works.
Grant is back with the Bairns this summer though and will travel to Ireland with the rest of the group – including injury and illness doubts David McCracken, Tom Taiwo and Craig Sibbald.
Peter Houston commented: “I’m delighted to get Peter tied down to a longer term contract. It was disappointing to lose for such a long spell of last season, but his level of performance up to that point had been outstanding.
“His work-rate throughout his rehab has been exemplary, he has looked after himself very well and I look to being able to get him back involved in competitive first team action at the appropriate time.”