The 29-year-old, who has played 48 times for Scotland, has become a firm fans' favourite since arriving on Tyneside from Edinburgh in the summer of 2010.
"Semore Kurdi's vision for the club excites me and that was a key factor in wanting to stay," said Stirling-born Hogg.
"The supporters are really good up here too and they have really driven this club forward. It has been a great feeling to play at Kingston Park in the last few weeks and the fans have been fantastic.
"They can see how improved the performances have been of late and the club is certainly turning a corner."
Falcons boss Gary Gold said: "Ally Hogg brings a lot of quality to the team and his experience from his time in the Scotland set-up is crucial."
Gilbert has released a new line of rugby cleats. The Gilbert Virtuo 8S is part of the exciting new product. Check it out.
The entire All Blacks apparel line has been updated for 2013/14. Check out the New Zealand All Blacks polo.
The Nike Tiempo is a solid rugby cleat and one of few styles still made from full-grain natural leather.
The Gilbert Blitz 8S rugby cleat is a great cleat at a great price of $69.99. Get a new pair of cleats today.
A cool looking all black rugby cleat with the high performance adidas is known for. Get in the Gear!
Wear the crest of the British and Irish Lions on your t-shirt. A great look for the summer.
The All Blacks Performance t-shirt is black with hints of blue from the training jersey. Very Cool.
The New Zealand All Blacks training jersey for 2013/14. Get in the Gear!
The USA Rugby Pro Alternate rugby jersey is perfect for any fan of the Eagles. Get yours to wear during the summer Test matches.
The NEW All Blacks 2013/14 jersey has arrived at World Rugby Shop. Dare to wear the colors of the All Blacks.