The 33 year olds contract expired this summer but he accepted the offer of a new contract.
Royals' director of football Nicky Hammond said: "He is a very good player. His quality gives him great versatility and he continues to set a good example for the younger players.
"He has a big part to play this season."
Gunnarsson, who joined the club from Watford in 2005: "There was never any doubt. I always wanted to stay and the club wanted to me so it was fairly easy to get everything done."