Ormsby has been restricted to just 16 appearances for Sale after suffering a serious knee injury shortly after arriving at Edgeley Park in 2008.
But the 30-year-old was a regular for the Sharks after returning to action last November - and new director of rugby Mike Brewer views him as a "key component" in the club's future.
"Kristian is a great player and has a big influence on the players around him," said Brewer.
"I am delighted he has decided to stay with us."
Ormsby, a former New Zealand Maori representative, made 11 appearances last season and finished the campaign with tries against Bath and Newcastle.
"It was very disappointing to get injured so soon after my arrival and the injury took longer than we expected to heal but I was delighted to rejoin the Sale pack towards the end of last season and am very much looking forward to the future with the club," said Ormsby.
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