The restricted free agent defenceman has agreed to a new six-year contract with the team, worth a reported $28.2 million US.
McDonagh has become a workhorse for the Rangers, combining with Dan Girardi to form the team's No. 1 blue-line unit over much of the last two seasons.
In those two years, he racked up 3,174 minutes of ice time, the 10th-highest number in the league.
He registered four goals and 19 points in the 2013 regular season and added a goal and four points in 12 playoff games.
McDonagh has spent his entire three-year NHL career with the Rangers, who got him in a trade with the Montreal Canadiens in 2009.
The Habs drafted him 12th overall in 2007 after he was named the top high school hockey player in his home state of Minnesota.