The England Under-21 international, who was brought up in Portugal, signed from Sporting Lisbon for £4million in 2014.
The 21-year-old, who has started all four Premier League outings this term, has extended his White Hart Lane stay until 2020.
A Spurs statement reads: "We are delighted to announce that Eric Dier has signed a new contract with the club which will run until 2020."
Tottenham boss Mauricio Pochettino has deployed Dier - naturally a defender - to great effect in a defensive midfield role.
And Dier is excited by his future at the north London club, saying: "If you look at the training centre, the young squad, the new stadium coming through - the club is in a great place.
"And as long as we stick together, everything is looking very exciting.
"There is a great core here of young players and even the likes of Christian [Eriksen], Erik [Lamela], Kyle [Walker] and Danny [Rose] are all still young.
"We have a young team, a core of young English players and young players in general and there is such a great future for the club."
Tottenham also confirmed a work permit had now been granted for forward Heung-Min Son, who joined in the summer from Bayer Leverkusen.
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