Hourihane, who has made 111 Villa appearances, said: "I'm absolutely delighted. It's exciting times for the club with us moving into the Premier League. I've waited all my career for the opportunity to play at this level and the time has now arrived.
"I'm really looking forward to the season ahead.
"It's a big period for me personally as I've come all the way from League Two to reach the top. I'm glad to sign and look forward to being here for seasons ahead."