"I still get a lot of emotion from this sport, and this team has so much passion. That made my decision clear, and we will work hard to chase more success together next year."
Welshman Elfyn Evans has also been rewarded for an impressive season with a seat for 2018 alongside his co-driver Daniel Barritt in the EcoBoost-powered Ford Fiesta WRC.
After finishing 21st overall in 2016, the 28-year-old came alive this season with second places in Argentina and Finland before he fulfilled a lifelong dream courtesy of a famous victory at his home Wales Rally GB to end the season a clear fifth overall.
He enthused: "Honestly, I can't wait to get back behind the wheel and Rally Monte-Carlo can't come soon enough. We'll be working hard over the Christmas break to ensure we're fully prepared, and the goal will be to build on the success of this year."
After seeing his team storm to the manufacturers' title too, team principal Malcolm Wilson OBE added: "To have secured both Sébastien and Elfyn is brilliant news for the team. We've been working towards this goal for some time.
"In Sébastien and Elfyn, we have a strong chance of defending our titles.
"It won't be easy, but they're both very intelligent drivers. There is no doubting their speed, but they also have a masterful approach to strategy that delivers results time after time."