The 21-year-old, who stepped up to the championship-winning team this year after an impressive debut season with Racing Bulls, has scored points in 8 of the 11 races he has taken part in, including a third-place finish in Monaco.
Hadjar, eighth in the overall standings with 71 points, missed the last three races with a wrist injury but is set to make his comeback at this weekend's Azerbaijan Grand Prix.
"We're very excited to continue our journey with Isack," said team principal Laurent Mekies in a statement.
"Since joining us at the start of the year, he has been superb on and off track, especially considering this is only his second Formula 1 season, which made extending his contract an easy decision."
Hadjar's contract extension comes after Red Bull agreed a new deal with Verstappen last month. The Dutchman is set to stay at the Milton Keynes-based outfit until the end of 2030.
It also ended the possibility of a promotion for Racing Bulls drivers Arvid Lindblad, the only rookie on this year’s grid, and New Zealander Liam Lawson, who filled in for Hadjar during his time on the sidelines.
The role of teammate to Verstappen has been something of a poisoned chalice for a string of hopefuls.
Hadjar, set to make his racing return in Azerbaijan, at the start of this year became the Dutchman’s seventh different teammate since he joined Red Bull in 2016.
Verstappen backed Red Bull’s move to keep the Frenchman.
"It only made sense for the team to do what they did with announcing him and I think he definitely deserved that," he said.
