Neville's previous deal was due to expire at the end of the current season and the club have moved to offer him a 12-month extension.
The 34-year-old, who joined Everton from Manchester United in 2005, has established himself as a key player in David Moyes' side since arriving on Merseyside.
Neville was delighted to pledge his future to Everton and praised the club for rewarding him with a contract extension.
"I feel really proud and this club has never let me down. It's shown faith in me again and for the next two years I'm going to give my all for this football club," Neville told the club's official website.
"That's what I've done for the last six years and that's what I'll continue to do."
The new deal will see Neville up to the age of 36 and he admits he hopes to continue his career beyond that.
"I want to play beyond that. But for the next two years I'm going to give my all.
"I love playing for Everton. I love the spirit in the club, I love the togetherness, and that's going to continue."