The 22-year old goalkeeper has penned a deal which will keep him at Carrow Road until 2015 but will spend next season at Preston North End on loan following his short-term stay at Deepdale last term.
"I've been at the club since I was eight years old so to get another contract extension is brilliant, I'm really pleased with it," Rudd told the club's official website.
"It means that I'm still around close to home and at a great club like Norwich.
"It went really well at Preston last year - I think we only lost two games when I was there and we were unbeaten at home. I really enjoyed it and that's one of the main reasons why I wanted to get the contract sorted and get back there again.
"Working here with Dave Watson is great given the stature of coach that he is, but you need to play football. As a young goalkeeper that's the most important thing. I'm really looking forward to the season starting."