He signed a contract extension in 2012 that was due to expire at the end of 2015.
When his new deal runs out, he will have been with the Dockers for 10 years.
Hill told the club website he didn’t want to be anywhere else.
“I just love the club and it’s really grown over the past few years,” he said.
“The future looks really good and I want to be a part of it.
“The club’s been great to me and I’m happy to sign on for a couple more years.”
Hill said the environment around the club was a major factor in his decision.
“The playing group has formed a really close bond, we’re all good mates,” he said.
“The coaching staff is great, too. Ross (Lyon) has been great; he’s really helped the club out.
“I’m really looking forward to being a part of that for a few more years at least.”
Fremantle general manager of player management Brad Lloyd said the club was very pleased with Hill’s long-term commitment.
“He has been a valuable player for the club for a number of years now with his running capacity, decision making and ball use and is still only 24 years of age,” he said.
“Stephen has some exciting years with Fremantle ahead of him.”
Hill’s new deal comes in the same week that the club announced a long-term deal with Michael Walters, who will be at the club until at least the end of the 2018 season.
“We are a football club that puts a strong emphasis on player retention, so it has been a positive week for the club to have long-term commitments from two of our quality players in Michael Walters and now Stephen,” Lloyd said.
Fremantle took Hill with the third pick in the 2008 NAB AFL Draft.
He played every game in his first season in 2009 and won the club’s best first-year player award.
Hill has played 128 career games and kicked 83 goals.
He appeared in 20 games in 2014, averaging a career-high 22 disposals a game.