Foley, who was reacquired by Toronto last January in a trade with Saskatchewan, had 48 tackles, six sacks and one forced fumble over 16 regular-season games.
"Ricky is from Toronto, a veteran of 10 CFL seasons, and a proven winner in our league,'' Argonauts general manager Jim Barker said in a release. "We are pleased he has committed long-term to our team and to his hometown.''
Foley, who grew up in the Toronto suburb of Courtice, Ont., is a three-time Grey Cup champion. He won titles with the B.C. Lions in 2006, the Argonauts in 2012 and the Roughriders in 2013.
The York University product was named the CFL's most outstanding Canadian in 2009 and he took the top Canadian honour in the 2012 Grey Cup game.
"This team has been through a great deal over the past few seasons but that's all over now and I can't wait for 2016,'' Foley said. "BMO Field is going to be electric and I'm really looking forward to a new beginning for this franchise, my teammates and our fans, as well as an opportunity to win another Grey Cup at home.
"The Six is my home and it feels good to know this is where I will be.''
The Argonauts will move from Rogers Centre to BMO Field next season and host the CFL's championship game next fall.
Also Wednesday, the Argonauts signed Canadian defensive back Marcus Grandison. The Toronto native played for the University of Toronto last season. Contract terms weren't released.
TORONTO - The B.C. Lions, Edmonton Eskimos and Hamilton Tiger-Cats led all teams Wednesday with five selections apiece to the CFL all-star team roster.
Receivers Adarius Bowman and Derel Walker from the Grey Cup champion Eskimos were honoured, along with defensive tackle Almondo Sewell, cornerback John Ojo and defensive back Aaron Grymes.
Lions offensive tackle Jovan Olafioye earned his fifth career CFL all-star team selection. Other B.C. players included linebacker Adam Bighill, running back Andrew Harris, receiver Emmanuel Arceneaux and punter Richie Leone.
Defensive players led the way for the Tiger-Cats. Defensive tackle Ted Laurent, linebacker Simoni Lawrence and defensive backs Emanuel Davis and Craig Butler were named to the roster along with kick returner Brandon Banks.
Ottawa's Henry Burris, the league's most outstanding player, was one of four Redblacks to make the team. The Montreal Alouettes and Calgary Stampeders were next with three selections apiece.
The Saskatchewan Roughriders (Brendon Labatte) and Winnipeg Blue Bombers had one selection each. The Toronto Argonauts did not have a league all-star this season.
WINNIPEG - Charles Ritchot may have been behind the play but has come forward to score a big prize.
The Winnipeg Blue Bombers website has named Ritchot the winner of a 50/50 jackpot from last month's Grey Cup game.
The team had earlier warned that the money was still up grabs and, if unclaimed by the end of December, would go back into the pot for next year.
The Bombers posted a photo of a smiling Ritchot holding a cheque worth $178,748.
That's half of the total take in 50/50 ticket sales from the Canadian Football League championship game in Winnipeg.
The other half goes to support minor football in Manitoba.
The Edmonton Eskimos defeated the Ottawa Redblacks 26-20, winning their first championship in a decade.