The left-back joined Town from Tranmere in 2011 and has been one of the club's most consistent performers since.
"I had about 18 months to run on my contract so obviously I'm delighted to have extended that," Cresswell told the club website.
"I am really enjoying my football here. There is a good feel about the place and it's enjoyable coming to work every day.
"I feel I have progressed as a player and like any professional, I want to get to the top and that means playing in the Premier League. Hopefully I can do that with Ipswich."