The new deal will keep the former Manchester United star at Goodison until the summer of 2013.
Neville’s previous deal was set to expire at the end of this season.
He told Everton’s official website: “I feel really proud and this club has never let me down. It’s shown faith in me again and for the next two years I’m going to give my all for this football club.
“That’s what I’ve done for the last six years and that’s what I’ll continue to do.”
Neville will be 36-years-old when his new deal ends, but the Everton skipper is confident he can play on beyond that.
“I want to play beyond that,” Neville said. “But for the next two years I’m going to give my all.
“I love playing for Everton. I love the spirit in the club, I love the togetherness, and that’s going to continue.”