The French defender, 25, arrived at Home Park in October as a free agent and has proved to be an influential member of Argyle's backline, initially signing a deal until January which was then extended until the end of the season.
Having helped the Pilgrims avoid relegation this season, Blanchard told the club's official website: "The momentum is really interesting. The club has put the dark times behind them and now we need to kick on. The club has ambition and this is really important.
"We think we will be able to push on to the play-offs next year."