The 25-year-old England international has played 147 times for United since moving to Old Trafford from Fulham in 2010.
"Chris has improved and developed immensely during the short time that I have been at the club and has become an integral part of the first-team squad," manager Louis van Gaal told the club website.
"It is also pleasing that he has scored some important goals this season too."
Smalling suffered injury problems in the first part of the season but has been a regular in recent weeks when Van Gaal's team have won six league games in a row to climb to third in the standings.
"I am so proud to play for such a great club," Smalling said.
"We have developed as a team over the course of the season under Louis van Gaal and we are now playing as a complete unit.
"This is a very exciting time to be at Manchester United, we are all determined to get back to where we belong and competing at the highest level."
British media reported last month that Smalling was a potential transfer target for Arsenal at the end of the season.
(Reporting by Ed Osmond, editing by)
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