The new deal sees Ruddy extend his commitment to the Norfolk club until 2017, with the Canaries having the option of extending the contract for a further year.
"I'm more than happy to commit my long-term future to the club," Ruddy said on the official website.
"I've thoroughly enjoyed my time at Norwich City - everyone has been very supportive. The whole club, the players and staff I have worked with have been fantastic.
"I've broken into the England squad while at Norwich, and without the opportunity they gave me I wouldn't have been anywhere near it.
"I was in a bit of a no-man's land before I joined the club, and they took a gamble on me.
"Thankfully I think it's paid off for both sides and now I'm just looking to keep up my form."