Madsen enjoyed a stellar year with the bat last season, despite Derbyshire suffering relegation from the LV= County Championship first division.
The 29-year-old was the first county batsman to reach 1,000 runs for the season and was named the Cricket Writers' Club County Championship Player of the Year.
That had prompted interest from other clubs, but Madsen is now committed to leading Derbyshire's bid to make an immediate return to the top flight.
"I'm proud to have signed a new contract with Derbyshire," Madsen said in a statement on Thursday night.
"I've thoroughly enjoyed my five years here so far. It's a fantastic club with great ambition.
"We've taken great strides over the past couple of seasons and I believe we can continue to make progress and hopefully compete for titles on all fronts."
Head coach Karl Krikken confirmed Madsen had attracted interest from rivals teams, but is pleased he will remain alongside Shivnarine Chanderpaul in a strong-looking middle order.
"Wayne enjoyed a magnificent campaign last season and we're delighted to have him here for the foreseeable future," he said.
"As well as tremendous performances with the bat, Wayne led the side really well as we tackled Division One for the first time.
"To be the first player to 1,000 runs, plus all the other accolades, was a real bonus to Wayne and the club.
"Other clubs wanted him, of course they did, but it's important to keep hold of our top players if we want to push to win trophies. I'm delighted we've been able to do this with Wayne."
- Sports & Recreation