The 22-year old striker has now extended his stay at Tannadice Park until May 2013, warding off a host of clubs who were beginning to show interest.
Goodwillie has scored 15 goals this season and Dundee boss Peter Houston was delighted with the extension.
"I am thrilled that David has agreed to extend his contract until 2013. To have secured his services until then is a major coup for the club," he told the club's official website.
"David has shown a terrific improvement in his overall game within the last 12 months as well as continuing to show the undoubted talent that he has always had and he is now recognised as one of the top strikers in the SPL.
"It is testament to the hard work, effort and enthusiasm of the staff that David sees his career advancing further here at Dundee United."