The New Zealand international has become a regular at the heart of the Hammers defence alongside James Collins in the past two seasons.
Reid moved to east London in August 2010 after growing up in Denmark and playing five seasons for FC Midtjylland.
"I've really enjoyed being here," said Reid. "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."
Now his future has been secured, Reid is looking forward to the move to the 54,000-capacity Olympic Stadium in 2016.
"It is an exciting time for the club," he added. "The fans have a chance to give their opinions and ideas this week with the consultation which is really important.
"They are the ones who back us week after week and I am sure, even though it is three years down the road, they are already looking forward to seeing what can be done when we move there."