Fultz was acquired from the Philadelphia 76ers at last year's trade deadline but didn't appear in any games with the Magic due to injury.
"Mo, Markelle, and Jonathan have each demonstrated a strong work ethic, while exhibiting a commitment to team values," president of basketball operations Jeff Weltman said in a statement. "We look forward to exciting futures with them as part of the Magic family."
Fultz averaged 8.2 points and 3.1 assists across 19 appearances for the Sixers last season. The former No. 1 overall pick provides depth behind starting point guard D.J. Augustin, who is in the last year of his deal.
Orlando posted a 42-40 record last year to win its first Southeast Division crown since 2010, which was the last in a stretch of three straight.