The 23-year-old moved to the Liberty Stadium in 2009 after a successful loan spell from Southampton.
The winger, who played a prominent part in the side that earned promotion to the Premier League last season, admits that agreeing a new deal was not difficult.
“I'm really pleased. We've just got to the Premier League and I want to be part of things,” he told the club's official website.
“It's a great club so I'm happy to be here. Talks went well and it was nice and easy to sign a contract.
“We've made massive strides as a club and I don't see why I should want to go anywhere else.
“I can learn my trade here and keep improving as a player.”
A number of Swansea players have signed new deals over the summer, including Ashley Williams, Angel Rangel, Neil Taylor, Andrea Orlandi, Garry Monk, Joe Allen and Tom Butler.
Dyer, who won the Supporters' Player of the Year Award last season, was optimistic about the club’s chances of survival and firmly believes they have the ability to remain in the top flight.
“I think we will do well this season,” Dyer continued. "First off, we wanted to achieve our Premier League status and now we want to stay there.
“The rest is about progressing as an individual and hopefully I will keep pushing myself and become a better player.
“Everyone wants to stay, fight for their place and play as much as they can.
“The fans have been with us on this journey to the Premier League – they have been outstanding – and we want to repay them by staying in the Premier League.”