Coady, who came through the youth ranks at Liverpool, joined Wolves from Huddersfield Town in the summer of 2015 and helped them gain promotion from the Championship to the Premier League three years later.
The 27-year-old has not missed a single league game since Wolves’ promotion to the top flight and helped them reach the quarterfinals of the Europa League last season.
Coady recently won his first England cap in the UEFA Nations League against Denmark last month.
Speaking after signing his new contract, Coady told the club's website: “It’s an incredible day, honestly. I look at what this club has given me over the years, and it feels like home to me - it has done since the first day I came. I’m honoured to play for this football club every day, so to sign a new deal is absolutely incredible.
“This is somewhere I’ve grown to love. On the first day I came, it was incredible the way people treated me and what the club gave me. Over the five years I’ve had kids, and this is all my kids know, all my family knows. When I play at night and my kids can’t watch, they come and wake me up to ask what the score was.
“Wolves is all they know. I watch football every night in the house but it’s always Wolves, my little lad Henry is five and he plays FIFA and is always Wolves. He’s not getting Coady or dad on his shirts anymore, he’s getting Raul, Neves, Adama, all they’ve known is their dad playing for this football club and it’s incredible.”
