Deacon, who turns 38 next month, started out combining his rugby with his day job as a dray man in the old amateur days, but duly made the transition to professional rugby.
"There was a lot of talk about what I would do this summer, but I have absolutely no interest in retiring," said Deacon, who featured 12 times in Gloucester's starting line-up during their Premiership campaign.
"I feel as fit as ever, I am highly motivated and I want the Club to have another successful season like the one just gone".
Deacon has provided stiff competition in the front row to both Phil Vickery and Trevor Woodman and his performances alongside Argentinean international Rodrigo Roncero have been real plus points for the Cherry and Whites this season.
With RWC 2003 around the corner Deacon's experience and power will be invaluable as Gloucester try to mount a serious challenge for the Premiership title.
"It's true that during the World Cup, our resources will be tested but it is up to players like myself and the younger ones at the club to step up and be counted", said Deacon.
The club's Director of Rugby, Nigel Melville, is delighted that Deacon has signed on for a further year, saying, "Andy Deacon has shown again this year that he is still capable of playing Premiership Rugby. He put in some great performances this season when we needed him to and I hope that he will be able to continue his form into next season".