The 30-times-capped Scotland international rejoined the club on a one-year contract in May after leaving the Gunners in 2007 for a six-year spell with Gloucester and Sale.
But the 30-year-old has now taken a firm grasp of the number one shirt having missed just two matches so far this season.
Dickinson said: "I'm delighted to extend my time here at Edinburgh. It's my home club. I started my career here in the academy 10 years ago and I've really enjoyed it since I've come back.
"I firmly believe in what the coaches are building. There's a great group of lads here and I'm very happy to be part of the plans for a bright future.
"All the staff are so passionate about Edinburgh Rugby as a club and all the players are the same. "We're all aiming in the right direction and I think we're really starting to generate that family feel.
"It's easier to get into a run when you play a lot of games and fortunately I've managed to do that this year. The important thing is to maintain that form for the club and the boys.
"I'm well aware that Wicus Blaauw is in and around the squad and is a quality player. It's that quality throughout the squad that drives everyone to perform every week, because if you don't someone else will take your place."
Meanwhile, head coach Alan Solomons has made one change to the Edinburgh team that will face Warriors in the deciding leg of the 1872 Cup - which also doubles as a RaboDirect PRO12 fixture.
The club travel to Scotstoun hoping to reverse last week's 20-16 Boxing Day defeat at Murrayfield.
A five-point victory will be required to take the silverware back along the M8.
Dickinson returns from last week's rotated rest break to start the match, with Blaauw moving to the replacements' bench.
Solomons said: "I think Wicus did very well and the more he has played the better he has got, but Ally has been in a rich vein of form and we welcome him back to start the match.
"I think we can take heart from the fact that we were in the driving seat for much of last week's match, however we failed to capitalise on some clear opportunities. Conversely, Glasgow took their chances.
"We know going to Glasgow is not going to be easy. They are on their home turf and are obviously in a strong position having taken the lead last week.
"We know it's going to be a tremendous challenge but the whole team is looking forward to it. Derbies are important games and the 1872 Cup has to be valued.
"It has a rich history and tradition but at the same time one cannot lose sight of the fact that it is a competitive match in the PRO12.
"That does not create a deflection of focus for us. It is an important game for two very good reasons."