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.
"From the moment I signed, I set out to dedicate myself to the team, and with the support of Laurent and everyone in Milton Keynes, I've been able to justify the faith they've had in me," said Hadjar.
"I'm constantly looking to listen, learn and push myself further every single day, which only makes me more excited about what lies ahead," he added.