The 31-year old striker has penned a deal which will keep him at St Mary's until at least the summer of 2016 after initially joining the club from Bristol Rovers in 2009.
"I'm over the moon to sign with Southampton for another three years," said Lambert, who has scored 13 Premier League goals this season.
"I am enjoying myself massively at this club and the aim now is to stay on for another three years and help push the club on further than where it already is.
"There is a lot of ambition in this club for the next few years and that is one of the main reasons that I have signed the contract - and that is why I want to end my career here.
"The core of players who have been together for two or three years are going to be here for another three or four years and that is a really good feeling."