The New Zealand international is part of manager Sam Allardyce's plans as they prepare to spend a second campaign in the Premier League following their promotion to the top flight last season.
"I've really enjoyed being here," Reid told West Ham TV. "It's a good club and we've done really well over the last couple of years. Now, I'm looking forward to the next two years.
"I think I have played some good football over the last two years but that goes for the whole team as well. Hopefully we can continue that. Of course we now plan to build on the last two seasons."
Reid moved to Upton Park from Danish outfit FC Midtjylland in 2010.