Kobel, 25, has agreed a two-year extension which included a reported salary increase.
"I just think I fit together with the club very well," Kobel said in a statement on Thursday. "This team has the potential to win titles if everyone works hard."
Dortmund sporting director Sebastian Kehl called Kobel "a leader" and "simply a great guy."
"Gregor has developed into a world-class goalkeeper for us in Dortmund. We are proud that we were able to inspire him for our goals and ambitions at BVB in the long term," he said.
German champions Bayern Munich reportedly see Kobel as a long-term replacement for 37-year-old captain Manuel Neuer.
The Zurich-born 'keeper moved from fellow Bundesliga side Stuttgart to Dortmund in 2021 and has since established himself as one of the club's best players, making 84 appearances.
Sports magazine Kicker named him the best goalkeeper in the 2022-2023 season.
Kobel was first selected to represent Switzerland in 2017 and has made five appearances, including one game at the 2022 World Cup in Qatar.
