Mason would have been an unrestricted free agent after next season. He will earn $3 million a year in the new deal after making $1.25 million next season.
The 31-year-old ranked second in the NHL with a .925 save percentage last season, tied for sixth with five shutouts and ranked 10th with a 2.35 goals-against average.
The native of Red Deer, Alta., is now Nashville's No. 1 goalie after Tomas Vokoun was traded to Florida last month.
In 84 career regular-season NHL games with the Predators, Mason is 41-21-6 with a .921 save percentage and 2.43 GAA. He was claimed by Nashville from Florida in the waiver draft in October 2003.