The 22-year-old was linked with a move away from the Hammers earlier in the summer following last season’s relegation.
“Obviously it’s great for me personally to know that I can now get my head down and concentrate on my football,” he told West Ham’s official website.
“That’s the most important thing for me to do now – get my head down, do my business on the pitch and have a good season.
“It’s nice to have the security of knowing my future is with West Ham United. I look around and see what they are building and I want to be part of the future. Fingers crossed, I’ll work hard and hope I can do the business.”
Collison has only recently returned from a injury.
“We definitely have competition for places in the midfield, but that’s what you want because it brings the best out of everyone,” he added.
“We’re all fighting to get into the starting XI, but it’s a long old season and the manager has already said it’s about having a good squad and a big squad and we feel we have that here and we are working together and looking to get promoted.”