The 26-year-old, the Black and Whites' star player in the Challenge Cup win over Warrington Wolves last term, was due to see his deal expire at the end of the year.
Sneyd becomes the latest Hull player to commit his future, claiming that he was never in doubt that he wants to remain at the KCOM Stadium in order to win further major honours.
"I'm really happy to be staying at the club and to take up the option," he told the club's official website. "We had a good year last year and the whole team played really well, which made my job a lot easier.
"A few lads recently have extended their deals with the club and it shows that people realise how good it is here and what potential we have. Hopefully we can have similar success to what we had last year."
Sneyd, who has previously played for Salford Red Devils and Castleford Tigers, was named Hull's Player of the Year in 2016.