The 20-year-old's deal runs until the end of June 2015, with the Lilywhites retaining an option for a further 12 months.
Wright, who hails from Melbourne, has captained North End at youth, reserve and first-team level and made 40 appearances to firmly establish himself during the recently finished campaign.
"I'm delighted to sign a new contract," he said in a club statement. "Obviously I had my year extension triggered the other week but I'm delighted to have signed this contract and to be here for at least another two years.
"I have been here four years now and I have been enjoying my time here and I am really looking forward to next season.
"I want the club to be as high as possible when I get to the end of this contract, in all seriousness that could be the Premier League.
"The Championship is where a club like this should at least be. It's a big club, we have a good team and it is a good set-up here. All the lads will tell you we have the same goals and that is to go (and) win the league next year."
Manager Simon Grayson added: "We are delighted Bailey has agreed to extend his stay with us .
"Since we arrived at the club he has shown what he can do and has also shown a willingness to learn and capacity to improve further, which is a vital attribute in any young player.
"He formed an excellent partnership with Paul Huntington in the last dozen or so games and we look forward to seeing him develop even further over the next few years and seeing him become an important part of a successful Preston North End."