The ex-Bradford Bulls forward, 29, has signed a two year contract extension that will keep him at Emerald Headingley until the end of the 2023 season.
Donaldson, who initially joined on a trial basis after being released by Hull KR at the end of 2018, was due to be out of contract at this season which starts against Wakefield Trinity on Saturday.
He has proved his worth as a valuable and popular member of Richard Agar’s squad, helping them win the Challenge Cup final at Wembley in October.
“I am over the moon to have it sorted,” said Donaldson.
“It has been a journey to get to this point and I think I am a different player now than when I first arrived at the club.
“I am really excited about what the future holds for me at the Rhinos now.
“The main thing was to get my contract sorted as soon as possible so I can keep my head down and not have to worry about my future.
“With a new baby - my son Tobias - it secures my future for him, too,
and that’s why this deal was massive for me.
“It has been an incredible journey for me at Leeds; those tough first few months is a blur now and I must say thank you to Richard Agar and Kevin Sinfield.
“They believed in me and have given me the opportunity to play at this great club. Leeds is my home now and I wear the badge with pride.”
Donaldson added: “I think I am playing the best rugby of my career now.
“I believe in the last year I have really managed to kick on; I have worked hard on my skills and I think in the next few years, the Leeds fans will see the best of me.
“I have a lot more to give on the field and hopefully things will continue to get better.
“Pre-season has gone really well and I have had an opportunity to work on the weaknesses in my game.
“That will hopefully make me a better and more complete player for the team. I am really excited about the new season.
“There are some great players who have come into our camp and the competition as a whole which will have boosted the standards for everyone.
“I think we are ready to go onto the next level this season. Our combinations are coming along nicely and we want to go on and win some more silverware.”
Agar said: “We are delighted that James has agreed a new deal.
“He is an exemplary professional who has been a great addition to our squad over the last two years.
“He is someone who works incredibly hard on his own game and is a great example for our younger players.
“I am looking forward to seeing how he continues to improve in the years ahead.”