The 24-year-old left-back, who has made seven appearances for the U's since signing in September, put pen to paper on a new deal on Wednesday.
With Liam Davis out for up to a month with a hamstring injury, the former Bradford and Exeter defender will continue to provide cover for the left side of the U's defence.
"I'm really pleased to have signed," O'Brien told the club's official website. "I have thoroughly enjoyed my time at Oxford. The fans are excellent and we have worked very hard as a team to get into a good position in the league.
"I am looking forward to playing a part and trying to carry that on. We have a tough game at Fleetwood on Saturday so right now I am totally focussed on helping the team get another three points."