Leonard, 21, has made 70 league appearance for the Shrimpers since joining the League Two side from Plymouth Argyle in 2011.
Upon signing the three-and-a-half year contract, Leonard told the club's official website: "I'm delighted to have signed a new contract because I've really enjoyed my time with Southend."
Leonard moved to the club as a right-back but has since become a holding midfield player and has thrived in his new position.
He added: "I've had the best season of my career so far and have managed to keep my place in the starting line-up in a position I only really moved to under the new manager in the summer.
"I want to continue my development and I feel that Southend United is the perfect place for me to do that."
United boss Phil Brown was delighted to secure Leonard's signature. He said: "Ryan has been a big player for us this season and has gone from a right-back when he signed to an important figure in the middle of midfield.
"He's got a big future in the game and I'm delighted that he's going to be staying with us for the future."