Potts was in the final year of his current deal but has agreed terms on a two-year extension which takes him to June 2024.
He's started only one Championship game this season and come off the bench five times, but started both Carabao Cup ties against Mansfield and Morecambe.
His was the second contract extension announced by PNE on Monday, a three-year deal for Jordan Storey having been revealed earlier.
The 27-year-old was a £1.5m signing from Barnsley in January 2019, with him having started 47 league games and come off the bench 43 times.
He's made seven Carabao Cup starts and two starts in the FA Cup.
Potts said: "There have been talks ongoing for a few months now so when I knew the club were wanting to extend my contract I just wanted to get things sorted as soon as possible, so I’m delighted.
“I love it here; I feel at home. It’s probably been a bit up and down in terms of playing and getting a proper run and momentum for myself, but the staff and players know what I’m about and when I do play I always give 100 per cent so I’m just happy to be staying here."
North End head coach Frankie McAvoy said: "He’s a great boy, he’s a real part of the good camaraderie and team spirit we have here and he’s a very likeable character around the place.
"He’s also a valuable member of the squad. He understands the importance of the squad and that’s vital for me as a coach. He knows and he understands that you’ve got to work hard to get into the team and he does that.
"Everyday he tries his heart out to get into the starting line-up and anytime he’s called upon he gives everything and I love that in a player."
A midfielder by trade, Potts has also had a couple of run-outs up front this season.
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