The deal will keep the 26-year-old shot-stopper at Villa Park until the end of next season.
Steer’s contract had been due to expire this summer but it has now emerged an extension was agreed in January, soon after he returned from a loan spell at Charlton.
The former Norwich trainee has since gone on to enjoy his longest run of first-team appearances since first joining Villa nearly six years ago.
Steer has started Villa’s last five Championship games, keeping three clean sheets as Dean Smith’s team have reignited their promotion hopes.
Signed by Paul Lambert in the summer of 2013, Steer’s time at Villa Park had before now been blighted by bad luck and injuries.
He was loaned to League One Charlton last August following Villa’s signing of Orjan Nyland but recalled when the latter suffered a season-ending Achilles injury in late December.
Steer then took the No.1 jersey when Smith’s January capture, Croatia international Lovre Kalinic, suffered a concussion during last month’s 2-0 derby defeat to Albion.
Striker Tammy Abraham is continuing to be assessed after being forced out of Saturday’s 3-0 win over Middlesbrough with a calf problem.
The Chelsea loanee, who has scored 21 Championship goals this term, linked up as planned yesterday with the England under-21s squad.
Boss Aidy Bothroyd remains hopeful Abraham will be able to feature in games against Poland and Germany.