The 27-year-old defender, who joined City from Arsenal Ladies in January 2014, put pen to paper before heading off to join up with her international team-mates ahead of the FIFA Women's World Cup, which gets under way in Canada next month.
Houghton told the club's official website, www.mcfc.co.uk: "I'm extremely delighted
It was always in my mind that I wanted to be here for longer, and I'm so happy to have put pen to paper on a new deal.
"I feel so at home at Manchester City
I know I've developed as a player over the last 16 months and as a team, we've got a really good philosophy and really good people who all want to play a part in helping the club to become the best it can be
"It was a very easy decision
There was no doubt in my mind and those close to me agreed
I knew I wanted to be part of the club's future over the next few years
I feel we're heading in the right direction."
Source : PA