The 32-year-old joined the Tangerines on a short-term deal until January this summer after leaving Notts County.
"Coming here on a short-term deal gave me it all to do," Bishop, who has scored once in 15 appearances this season, told the club website.
"Fair play to the chairman (Karl Oyston). He said if I came in and did well for him then he'd offer me a long-term deal. He's stuck to his word."
Blackpool are performing above expectations and sit fourth in the table, four points adrift of Burnley and QPR in second and third.
They next travel to Yeovil tomorrow night.