The 31-year-old won the Golden Glove last season for keeping a club-record 13 clean sheets in the Reds' FA Women’s Championship title win.
Liverpool Women manager Matt Beard said: “Lawsy was a leader on and off the pitch last year. Her performances were fantastic – when we needed Lawsy she stood up tall and made the big saves in some big games in some big moments.
“Her distribution is the best I’ve ever worked with in a goalkeeper. That’s so important in modern football.
“She can play short, she can play long, her composure and calmness on the ball is a gamechanger for us. She deserved the new deal and I’m looking forward to seeing her kick on this season.”
Laws said: “It was such an easy decision when Matt spoke to me and said he wanted me to stay on. The philosophy we have, to build on that and see where we can go especially in the WSL now we’re there.
“I just said ‘When do you want me to sign?’ because I’m ready and willing to push this club on. The staff, the men’s side, the new girls who’ve come in have all been absolutely fantastic and we are like a family and I’ve never been in a culture like it.
“I’d like to think I’m still in the prime of my career. Goalkeepers do tend to go that little bit longer and get better as they go! I feel like I’m bang on form and last season was probably one of the best, if not the best, of my career.”
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