Terms were not disclosed, but a source confirmed to ESPN that the four-year extension through the 2023 season is worth $34 million, with $18 million guaranteed and another $6 million available through escalators.
The deal makes Moore the highest-paid slot cornerback in the NFL.
"Kenny personifies the characteristics that we look for in a Colt with his leadership, tenacity and work ethic," general manager Chris Ballard said in a statement. "We are happy for Kenny and his family. He has done the right things and deserves this. We also appreciate the hard work by [agent] Buddy Baker and his team in getting this deal done."
The Colts claimed Moore, an undrafted free agent out of Valdosta State, off waivers after he was released by the New England Patriots in September 2017.
Moore, 23, had 77 tackles, three interceptions and 1.5 sacks last season.
While lined up in the slot last season, Moore's three interceptions were tied for first in the NFL, his 10.5 disrupted dropbacks were first and his 517 defensive snaps were seventh, according to ESPN Stats & Information.
Ballard has made it a priority to re-sign as many of the team's core players as possible while limiting the number of outside free agents signed.
The Colts have re-signed kicker Adam Vinatieri, offensive lineman Mark Glowinski, defensive lineman Margus Hunt, safety Clayton Geathers, cornerback Pierre Desir, punter Rigoberto Sanchez and long-snapper Luke Rhodes to go along with Moore.