Leg-spinner Waller is now due to be on the staff until the end of 2020, having excelled in recent Vitality Blast seasons.
In 2018, he returned the best economy rate of any Somerset bowler - his 6.82 runs per over far superior to the next best of 8.5 - as the club went all the way to finals day.
We came really close to winning silverware this year and both the club and I share the same hunger and drive to achieve this.Max Waller
The 30-year-old will also be available for selection in the 50-over Royal London Cup if required.
"I'm really pleased to have committed myself to Somerset for two more years," Waller said.
"We came really close to winning silverware this year and both the club and I share the same hunger and drive to achieve this. That is a massive reason for staying here at this special club.
"There's a genuine belief that this squad can achieve something great and I was always very keen to continue being a part of that.
"I'm already looking forward to next season and can't wait to get out there, entertain and help Somerset win games of cricket in front of the fantastic members and supporters who have been so supportive towards me for over a decade."
Somerset director of cricket Andy Hurry added: "This is a bespoke contract that will enable Max to be available for all of our Vitality Blast games and will provide him the opportunity to apply his craft across global T20 & T10 competitions outside of the Blast."
Meanwhile, England are 1.071 to win their upcoming Test series in Sri Lanka, while the hosts are priced at 15.00 and the draw is 15.00.
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