diff --git a/CHANGELOG.md b/CHANGELOG.md
index a370e3b0..9c6c5a07 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -36,6 +36,7 @@
 - doc: fix MMM-Teslamate and ha-addon-teslamate project links (#3973 - @olexs)
 - doc: update the Contributor's Guide with the latest requirements (#4017 - @JakobLichterfeld)
 - doc: Documentation for new endpoint changes (#3978 - @jlestel)
+- doc: Add Grafana VS Code extension documentation (#4025 - @JakobLichterfeld)
 
 ## [1.29.2]
 
diff --git a/website/docs/development.md b/website/docs/development.md
index 32ccd164..631775f8 100644
--- a/website/docs/development.md
+++ b/website/docs/development.md
@@ -115,3 +115,14 @@ Then build the image with `make grafana` and run the container via `docker compo
 Access the Grafana at [http://localhost:3000](http://localhost:3000) and sign in with the default user `admin` and password `admin`.
 
 Then edit the respective dashboard(s) locally. To export a dashboard hit the 'Save' button and select `Save JSON to file`. The final JSON file belongs in the directory `./grafana/dashboards/`. To apply the changes rebuild the image and start the container.
+
+### Grafana VS Code Extension
+
+The Grafana VS Code extension allows you to open Grafana dashboards as JSON files in VS Code, and preview them live with data from a Grafana instance of your choice.
+
+- Open a Grafana dashboard JSON file
+- Start a live preview of that dashboard inside VS Code, connected to live data from a Grafana instance of your choice
+- Edit the dashboard in the preview, using the normal Grafana dashboard editor UI
+- From the editor UI, save the updated dashboard back to the original JSON file
+
+see: [grafana-vs-code-extension](https://github.com/grafana/grafana-vs-code-extension)