The import receiver joined the Lions in August via trade with Hamilton. He finished the 2011 campaign with 58 receptions for 859 yards, highlighted by a career-high 100-yard TD reception versus Saskatchewan in September.
Bruce added four catches for 82 yards in B.C.'s West final win over Edmonton and had five more receptions for 73 yards and a TD in the club's 34-23 Grey Cup victory over Winnipeg.
"Arland's football resume speaks for itself," general manager and vice-president of football operations Wally Buono said in a statement. "He is an exciting player who helped make our offence even better in 2011. Having him sign an extension today helps us continue building a strong team for this season and beyond."
New head coach Mike Benevides is excited to have Bruce back in the fold.
"Arland was a fantastic addition last year and not only instantly gave our offence another dimension, but was also a catalyst in our coming together as a team," Benevides said. "Having him attend training camp in 2012 and fully immerse himself in Jacques Chapdelaine's system is going benefit him, Travis Lulay and our entire offence."
Bruce said joining the Lions gave him a new lease on his football life.
"I could not be happier to sign this extension," Bruce said. "I have fallen in love with football again since coming to the West Coast and I'm very honoured to know that I will be given an opportunity to try and win another championship for our fans."