Bruce's deal was set to expire at the end of the current campaign and, with Hull battling against relegation, serves as a vote of confidence.
"I'm delighted to have committed my future to the club – we have achieved a lot in the few years we have been here but this is just the beginning of the journey," Bruce said.
"Premier League survival is now crucial for us at this time, as is improving our training facility as we look to continue to grow and become a solid, well-run Premier League club.
"I would like to thank the owners for their continued support as well as the fans; we have had the supporters backing since we arrived here in Hull and long may that continue."
Bruce moved to Hull prior to the 2012-13 campaign, having departed Sunderland in November 2011.
In his maiden season in charge, Bruce led the club to second in the Championship and automatic promotion back to the Premier League after a three-year absence.
Last season, Hull maintained their top-flight status with a 16th-placed finish and reached the FA Cup final for the first time in their history, before they were beaten 3-2 by Arsenal after extra-time.
They are five points clear of relegation with 10 games to play and face rock-bottom Leicester City on Saturday.
