The Republic of Ireland international was one of the star performers for the Tigers last season as they were promoted to the Premier League.
And the former Manchester United, West Brom and Sunderland defender has now given manager Steve Bruce a pre-season boost by penning the new contract. "I'm delighted to sign a new deal," said McShane on Hull's official website.
"Last season was such a great season and then I got offered the new contract. I couldn't wait to come in and get it signed and now I can just get on with looking forward to the new season.
"I'm really looking forward to testing myself in the Premier League again. When we got relegated from the top flight in 2010, it was always my aim to get back up there.
"Now I've got the opportunity to play up there again. I'll admit there were times when I didn't think it would happen, but we had such a great season last year and we're back up there now."
McShane has made 98 appearances for Hull, having initially signed on loan in 2008.
The announcement comes amid reports that Charlie Austin's move to the KC Stadium from Burnley has fallen through.
The striker was expected to be confirmed as a Hull player this week, but that no longer appears to be the case.
There was no immediate comment from the club on Tuesday morning.
Source: PA
Source: PA