This season Thomas has been a regular fixture for Sale in his preferred position at inside centre.
Sale director of rugby Philippe Saint-Andre said: "Lee is a great young player and is important to my squad. He can play centre and number 10 and is a good kicker too. Lee had offers to return to play in Wales but wants to stay with us."
Sale have already confirmed French number eight Sebastien Chabal had also spurned advances from his homeland to sign a new deal at Edgeley Park.
Thomas added "Philippe, Kingsley Jones and Jos Baxendell have helped me improve my game.
"We have a great squad here at the club and competition for places is intense. I want to do my best for the team and hopefully help us to win some silverware."