Gomes had signalled his intention to retire at the end of the 2018-2019 season but coach Javi Gracia indicated he wanted the 38-year-old to stay.
Watford confirmed the Brazilian will go into a sixth season at Vicarage Road.
Gomes plays a back-up role to Ben Foster but started throughout the Hornets' run to the FA Cup final last season.
He then conceded six at Wembley as Manchester City completed a domestic treble, although the score could have been heavier as he performed well regardless of the heavy defeat.
"I couldn't say no to this club," Gomes wrote on Instagram. "Looking forward for a new season."
Watford is yet to bring in any new players ahead of the 2019-2020 season, which it will kick off at home to Brighton and Hove Albion on 11 August (AEST).