The 28-year-old was released by Villa at the end of the 2011-12 season, but was quickly given the chance to return when Paul Lambert was appointed manager.
Guzan managed to establish himself as Villa’s first-choice keeper last term and was named Player of the Year by both his teammates and supporters after helping the club to avoid relegation.
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"For me, it's an honour and a privilege to play for Aston Villa Football Club and to commit my future long-term. I'm overjoyed by it," he told the club’s official website.
"To have this opportunity to commit my future, with the plans and the future being what they are going forward, it's tremendously exciting and I know that's not just for me but for everybody, including the fans.
"This is what Aston Villa is all about, we're a very connected and very committed group and we want to strive to be the best we can possibly be going forward. What we're building here as a club, what the manager is building could be very special.
"From a personal standpoint, especially after last season playing consistently through virtually the entire season, hopefully now I'm coming in to some good years ahead and to be able to do that at Villa is exciting. It's going to be good times ahead."
Guzan, who joined Villa from Chivas USA in July 2008, was hailed by manager Lambert as "colossal" for his contribution last season.
"Brad has been exceptional for the club, really fantastic on and off the pitch," Lambert added.
"He's always bubbly around the place and a really solid character. He's a good guy as well which is really important. Overall, he's a credit to the club."
Andreas Weimann and fellow academy graduate Nathan Baker have also agreed new deals this summer.