The 23-year-old, who has made 138 appearances since making his debut for his hometown club in 2007, was already tied to the club until the end of 2014 but jumped at the chance to sign a three-year extension.
"I'm really settled here," said Houghton, who has won the club's players' player-of-the-year award for the second successive season.
"It's my hometown club, we've just started a family and I just love playing for the club."
Houghton's form was rewarded with a call-up to the England Knights squad last year and Hull coach Peter Gentle believes full honours are not too far away.
"He is without doubt a future international at the highest level and he must be very close to receiving a call-up to the full England squad," said Gentle.
"That is why we want to keep him here. He is one of the country's brightest talents and players like that don't crop up every day.
"His attributes on the field are second to none. His work ethic is astonishing and, despite being just 23, he is a great leader for us."