The 21-year-old signed a two-year deal when he arrived at Tannadice in July and has now extended that by 12 months to tie himself to the club until May 2016.
The powerful and skilful Holland-born Turkey youth international has scored seven goals in his first 16 games.
Manager Jackie McNamara said: "Such has been the impact of Nadir, I felt it was important to move quickly and offer the extension. He has fitted in so well, not just on the park but also in the dressing room.
"His ability is aligned with his desire to improve as a footballer and he wants to do this at Dundee United.
"His performances and goals have helped the club progress and with this commitment to a longer-term contract, Nadir has shown his desire to be part of what we are building at Tannadice."
McNamara, whose team scored four goals for the sixth time this season when they beat Partick Thistle on Saturday, added: "It is exciting times to be a United fan and such news should encourage our fans to come along and watch the talent we have playing for us."
Ciftci added: "From the first day at training I knew I would enjoy being at Dundee United and over the first few months of the season this has proved to be the case. It was an easy decision for me to extend my contract.
"The team is playing great football and we have a chance to grow even better. It is exciting to be part of this team and I have also been delighted with the response of the United fans to my style of play.
"Signing this contract extension allows me to focus on improving as a footballer and this is the best place for me to do so right now."
The extension comes three days before the former Portsmouth player faces a Scottish Football Association disciplinary tribunal accused of grabbing an assistant referee by the throat following his later rescinded red card during United's League Cup defeat by Inverness last month.