Reading's director of football Nick Hammond said: "Stephen Hunt is a great example of what can be achieved with belief, dedication and willpower.
"He rose to the challenge last season with some superb performances to become a key member of our team."
Hammond added: "We think he will get even better in the next three years."
Hunt's performances for Reading last season earned him a call-up to the Republic of Ireland's summer tour to America and he played against both Ecuador and Bolivia.
He had recently attracted the attention of West Ham and Bolton but insists he was always happy to remain with the Royals.
"I'm very pleased to sign," commented Hunt. "Over the last couple of seasons Reading Football Club has become a very big part of my life.
"Hopefully both the club and myself will continue to move forward. I am very happy to stay."