"It's one of those things that took a bit of time, but we got there in the end and I'm very happy to be here for the next part of my career," the 26-year-old told the club website on Thursday.
West Ham said several leading European teams had expressed an interest in Reid, who joined the London club in August 2010.
Tenth-placed West Ham, who lost 1-0 at home to Premier League leaders Chelsea on Wednesday, are without a fixture this weekend.
(Writing by Tony Jimenez, editing by Toby Davis)
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