The 30-year-old Portuguese midfielder joined the Owls from Charlton in 2011.
“I couldn’t be happier because this is my home, this is my club,” said Semedo.
“It’s a dream come true and I would like to finish my career with Sheffield Wednesday.
“I cannot wait to get back into the pre-season training and start the hard work for the new season.
“My confidence is high, I am feeling great and I want to continue to grow as a player here with my club.
“There have been some changes over the summer but I know our supporters will be totally behind the whole team we have in place for next season.
“You see, these are very special supporters. We are all as one at Sheffield Wednesday, today and tomorrow, which is why I love to be at this club.”