Lennon, who is 34 next week, will sign the deal on his return from holiday, when he is expected to be confirmed as Celtic's new club captain following Jackie McNamara's move to Wolverhampton Wanderers FC.
Former Northern Irish international Lennon has made 222 appearances for the Glasgow club since arriving in a €9m transfer from Leicester City FC in December 2000.
'A special type of player'
New Celtic manager Gordon Strachan welcomed the news, saying: "I've never been lucky enough to have a player like Neil in my previous sides. We tried to make people like that but it is a special type of player, a special discipline." Scottish Premier League runners-up Celtic will enter the UEFA Champions League second qualifying round.
©UEFA.com 1998-2013. All rights reserved.