Heaton, 29, enjoyed a fine season last term as he kept 10 clean sheets for the Clarets and became the first Burnley player to be called up for England since 1974 for the friendly against Republic of Ireland and the European Qualifier in Slovenia.
He also won the club’s players’ player of the season award but could not prevent the club from dropping back into the Championship after the relegation.
Former Manchester United keeper Heaton, who was manager Sean Dyche’s first signing on a free transfer from Bristol City in summer 2013, said: “I’m very pleased as I’ve had two great years here so far and I’ve thoroughly enjoyed playing for this club.
“It’s another three-year deal and this has felt like my home which has helped with my performances so I don’t want to stop raising that bar and pushing myself to improve.”
“I really love playing for the manager and working with the staff, particularly the goalkeeping coach Billy Mercer who I feel I’ve improved under and I’m really excited for the times ahead.
Heaton admitted he would like a return to the England squad after enjoying his time with Roy Hodgson’s men in the summer, despite not making it off the bench in the games against Ireland and Slovenia.
“I feel like I’m getting better all the time and that is vital for me and I want to keep doing that,” he added.
“We were disappointed about being relegated but the way we went forward with that means we can take the momentum into this season and push for an immediate return to the Premier League.
“I certainly look back over the last two years and the important thing for me is that I feel there is more to come. I had a taste of the Premier League last year and the gives you the hunger to get back and I want to be doing that with Burnley Football Club.
“It’s vital that I’ll be playing football week in, week out as I had a few times in my early days where I spent time on loan. It was a great foundation at Manchester United but it got frustrating and I made the decision early on in my career to always be trying to play.
“That is what I’ve done over time and it’s important that I stay here and keep moving things forward.”