The 28-year-old United States international will now remain at Villa Park until the end of the 2016/17 season at least.
The deal represents a further display of trust from manager Paul Lambert, who installed Guzan as his number one ahead of Shay Given before the start of last season.
Lambert's decision was vindicated as Guzan went on to enjoy a stellar campaign which earned him the player of the year award.
"This is just the start now, the start of hard work. We have to build on last year and go forward and that is very much the collective mindset at the club," Guzan said on Villa's official website.
"We grew together as a team last season and now it's time to kick on again. We'll welcome the new guys with open arms and allow them to join this special family that we've started to create from last season. It's an exciting time for the club for sure.
"When you bring in new players you have fresh bodies, fresh blood, fresh excitement and you need that to prevent things from becoming stale and guys getting complacent. You want competition for places, you want guys pushing each other and helping each other. When you bring in new faces it lifts everybody.
"For me, it's an honour and a privilege to play for Aston Villa Football Club and to commit my future long-term. I'm overjoyed by it."
Guzan joined Villa in July 2008 from American side Chivas and had to bide his time behind both Brad Friedel and then Given before being given his stripes.
"Brad has been exceptional for the club, really fantastic on and off the pitch," Lambert added. "He's always bubbly around the place and a really solid character. He's a good guy as well which is really important. Overall, he's a credit to the club."
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- Paul Lambert