The 22-year-old scrum-half has become an integral part of the national team under Matt Williams, and has been tipped to make the Lions summer tour to New Zealand.
Now the SRU are confident the re-signing of Cusiter will help other younger players remain in Scotland with the professional teams.
Grainger said: "Chris is one of the best players not only in the Scotland set-up, but in the whole of the UK just now.
"His commitment to the professional game in Scotland mirrors Scottish Rugby's dedication to that level of the sport as we know that the professional teams are central to the development of Scotland's international teams.
"Chris is already a mainstay of the Scotland team and is an inspiration to youngsters taking up the game."
Cusiter admits the SRU's recent declaration of support for the three pro teams was a major factor in his decision to stay in Scotland.
The governing body last month assured Edinburgh Gunners, Glasgow Warriors and The Borders that their future was secure for the next three years.
Cusiter said: "Knowing that The Borders club is to be fully funded by the SRU for at least three more years was a significant factor in my deciding to stay at Netherdale."