"I'm really excited to be here for the next few years," said Varndell.
"The group of players we have here know what it's like when the going gets tough and I think we are all the stronger for what we went through last season.
"Now things are looking up and we've got a fantastic squad of players here who I believe can really achieve something together in the coming seasons.
"You only have to look around at some of the young talent we have coming through and some of the experience that Dai Young has organised around that, to get excited about what is to come.
"I am loving my rugby this season and the type of rugby that we are playing at Wasps is fantastic when you're a winger."
London Wasps Director of Rugby Young added: "Tom has played a big part in our improvement this season and his finishing is second to none. I am really pleased he's going to be a Wasps player for the foreseeable future."