The 29-year-old, who is currently recovering from an Achilles tendon injury, scored one try in six games for the Sharks before he was sidelined.
Tuilagi joined on an initial short-term deal in July 2020, following his release by Leicester Tigers.
"The boys here at Sale are fantastic," Tuilagi said.
"The environment that the coaches and staff have created is so good for me both on and off the field.
"We're going in the right direction and it's a really exciting time to be involved with the club.