The 26-year-old Kingston, Ont., native is coming off his first season in Florida in which he set career highs in assists (21) and points (25).
"Bryan proved to be one of our top four defencemen last year and he will continue to play a vital role in our team's future success," Panthers GM and coach Jacques Martin said in a release. "He is a very talented and physical player with a tremendous work ethic, who is an asset to our organization both on and off the ice."
In 298 career regular-season games with Florida and the Vancouver Canucks, Allen has 18 goals and 39 assists for 57 points.
The former fourth overall draft pick was acquired by the Panthers in the deal that sent goaltender Roberto Luongo to Vancouver last summer.