Spencer has been capped 10 times by England, the most recent coming in November during the Autumn Series.
He joined Bath in 2020 from Saracens and led the side to a first Premiership final in nine years last June, only for them to lose to Northampton.
“Ben is not only a world-class player but the leader and captain of our team and a true family man,” said Bath head of rugby Johann van Graan.
“He has that special game-winning ability that inspires others and brings out the best in the people around him.
“Time and again, Ben has demonstrated he can perform on the biggest stage and is such a huge part of what we are all working towards on our journey at the club.”
Spencer joins a growing list of players to agree new terms with Bath ahead of next season, including England centre Ollie Lawrence, prop Beno Obano and hooker Tom Dunn.
Number eight Jaco Coetzee, back rows Ethan Staddon and Ewan Richards and scrum-half Tom Carr-Smith have also signed new deals.
