Gardner, currently sidelined through injury, was into the final 12 months of his existing deal.
The 23-year-old spent last season on loan at Sky Bet Championship clubs Brighton and Nottingham Forest in the Championship, before returning to Villa Park to be assessed by boss Tim Sherwood ahead of the current campaign
Sherwood has decided to extend Gardner's stay with the club, with the player having been on Villa's books since the age of seven.
"I am delighted to sign this new deal and extend my time with this great club," Gardner told the club's official website, avfc.co.uk.
"I am looking forward to working with the gaffer going forward and being someone he can turn to and do a job for the team.
"I enjoyed my time on loan but now I'm determined to make an impact this season with Villa and show everyone what I'm capable of."
Gardner made his Villa debut as a substitute in a 3-1 away win at Chelsea in December 2011 and has since gone on to feature 18 times for the first team.
Including loan spells with Coventry, Sheffield Wednesday, Brighton and Forest, he has played more than 60 first-team matches
Source : PA
Source: PA