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."
Smid was taken with the ninth pick in the 2004 NHL Draft by the Anaheim Ducks and dealt to the Oilers in July 2006 as part of the Chris Pronger trade.
"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."
Stay Connected
NHL.TV™
NHL GameCenter LIVE™ is now NHL.TV™.
Watch out-of-market games and replays with an all new redesigned media player, mobile and connected device apps.
Introducing the new official NHL App, available for iPhone, iPad and Android smartphones and tablets. A host of new features and improved functionality are available across all platforms, including a redesigned league-wide scoreboard, expanded news coverage, searchable video highlights, individual team experiences* and more. The new NHL App on your tablet also introduces new offerings such as 60fps video, Multitasking** and Picture-in-Picture.
*Available only for smartphones
** Available only for suported iPads