The new deal will keep Reid at West Brom until the summer of 2014.
Baggies’ sporting and technical director Dan Ashworth said: “We’re delighted to have agreed a new contract with Steven.
“He’s had a good, solid season and proved he is still more than capable of playing Premier League football.
“He is also a fantastic person to have around the training ground.
“Steven is valued by the club not just because of what he brings to the football field, but also his contribution off it.
“He has an important role to play as we look to establish ourselves as a top-flight club.”
