The 20-year-old talent's previous contract with Frankfurt was valid until June 30, 2028, but is now extended to 2029, the club writes on its website.
"Today is a big and happy day for me and my family. I feel incredibly comfortable in the club and in the city and have felt a great trust from day one", says Larsson.
The former Malmö FF player was involved in a notable quarrel with national team captain Jon Dahl Tomasson during the national team gathering in September and chose to leave the squad.
Larsson was then critical of not getting any playing time in the away match against Azerbaijan in the Nations League.
When Tomasson presented the squad for the matches against Slovakia and Estonia next week, Hugo Larsson was included again since the parties had talked it out.
I called Hugo, as I call all players. We had a good discussion. We talked about football and life. He wants to be part of it, which is extremely positive, said Tomasson in connection with the national team selection earlier in the week.