The 27-year-old Smid is in his seventh NHL season. He has a goal and three points in 34 games this season and has posted career totals of 10 goals, 62 points and 361 penalty minutes in 443 games, all with the Oilers.
"It's a huge day for me," Smid said. "I feel really happy for me and my family to stay in Edmonton. It's my home now."
"It's a great signing for us," veteran forward Ryan Smyth said. "He's a great warrior, a great competitor. He blocks a ton of shots for us."