The 29-year-old Londoner, who played 38 times for Hibs last season, is looking forward to helping the Edinburgh side launch a push on promotion to the Premiership.
Speaking to the club’s website, Fontaine said: “I really enjoyed last season and now the aim is to add to the progress
that we made and go one step further by getting up to the Premiership.
“The manager has made some good signings so far this summer and I can’t wait for the new season to start.
“I enjoy playing for the club and working with the manager – this was an easy decision for me to make and I’m glad it’s now all sorted out.”
Hibs boss Alan Stubbs said: “This is excellent news, Fonts is a big part of our plans here at the football club and the fact he has committed his future to Hibernian is a huge plus.
“He is a model professional and I think everybody who watched the team play last season recognised the contribution he made.
“It’s extremely pleasing to secure Fonts and this deal will give everybody associated with the club a big lift heading into the start of pre-season training tomorrow.”
And speaking to Sky Sports News HQ, Stubbs rubbished recent reports linking midfielder Scott Allan with a move away from the club.
The former Dundee United and West Brom player has been the subject of speculation linking him with a move to fellow Championship side Rangers but Stubbs said: “Scott will be reporting back tomorrow for pre-season.
“Scott Allan is a Hibs player and I don’t see any reason why that should change. Scott has one year left on his contract and we are comfortable with the situation.
“The most important thing is that we try and put a team together that will be fighting for promotion and when you do that you have to have your best players and Scott falls into that bracket.
“So the club’s needs will always come first. We can’t stop teams from putting bids in but we are not welcoming them at all as he is an important member of the squad… and, as far as I know, there have been no bids for him at all.”