The 22-year-old scrum-half has emerged as a serious contender for the Lions tour of New Zealand this summer after impressing with club and country.
Cusiter said: "I'm very happy in my game just now both with Scotland and at club level, so remaining with The Borders offers me continuity in my rugby and I am delighted to be able to stay with the club."
Scottish Rugby Union director of rugby Ian McGeechan believes the form of Cusiter is positive proof the country is beginning to reap the rewards of hard work at grass-roots level.
The ex-Lions and Scotland coach said: "We are delighted Chris has chosen to stay with The Borders.
"He is a product of our development system - he's been one of the Scottish Institute of Sport players - and is an excellent example of how our professional support has nurtured his talent and has highlighted what a good player he has become.
"For such a young man, he is one of the core players in our professional game and it's great that he's committed to The Borders for another three years."
And Borders head coach Steve Bates insists the re-signing of the player will boost his drive for squad newcomers.
He added: "Chris is integral to the development of our team. His three-year commitment to The Borders goes hand in hand with the recent announcement from the SRU that they will continue to fund the three professional teams.
"Chris staying with us means rugby here at The Borders will continue to attract quality players and supporters alike."