The 26-year-old flanker has already amassed 82 test caps since making his debut in 2012 and local media reported the contract was worth around A$1.2 million ($883,920) a season.
"I never really thought about going elsewhere or entertaining anything like that," Hooper said in a statement on Friday. "I was really keen to stay in Australia, and keep doing what I can for the Wallabies and the Waratahs.
"I'm not really into contracts and all that back-and-forward, so to know that I'm sorted through to the next World Cup is really comforting and just means I can throw everything into the Waratahs and Wallabies."
(Reporting by Greg Stutchbury; Editing by Peter Rutherford)
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