The 27-year-old was part of a Sarries side which also beat Exeter in the Premiership final to add to their European Champions Cup crown.
Skelton played in Super Rugby with the Waratahs and has 64 Wallabies caps to add to 60 appearances for Saracens.
“My wife is happy here, we’re both happy,” he said. “She’s playing Rugby as well and enjoying it.
“She’ll take it a little bit more seriously next year and having two years is a bit more security for us as a family and we can focus on other things aside from Rugby.”