The Wales international's new contract keeps him with the Baggies until June 2016, with the option of a further year included in the deal.
Myhill has provided strong competition for Ben Foster this season and performed well when called upon to cover for the former Manchester United player when he suffered a hernia problem.
Albion's sporting & technical director Richard Garlick believes the squad is well equipped with goalkeepers and praised coach Dean Kiely for his work with Foster, Myhill and Luke Daniels.
"We've seen this season it is important to have a good number two," Garlick said. "Boaz has definitely contributed to our success and stepped up to the plate when Ben Foster was injured.
"In the Barclays Premier League it is vital you have a number two you can trust in but also a number two that can push your number one.
"Everyone at the club has faith in both of them and, with Luke Daniels, we've got a good set of three keepers who push each other in training and have a good understanding with each other.
"It is testament to the work Dean Kiely has done that we have such a strong unit where all the keepers are happy to support each other no matter who is playing."
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