The 37-year-old former Terriers captain worked with the under-23s and under-18s after ending his playing career before stepping up to be part of Jan Siewert's first-team coaching staff earlier this year.
Hudson will operate as first-team coach next term and work alongside head coach Siewert and his new assistant Colin Bell after penning fresh terms.
Town chief executive Julian Winter said: "During Mark’s days as a player, when he led the club to promotion as captain, we knew we potentially had a very good coach on our hands and that is certainly becoming the case. As such, we are delighted that Mark has signed this new contract today.
"After doing some great work in the Academy, he has stepped up and become an important part of our first team coaching structure under Jan Siewert. Mark is still learning but has already offered great support to Jan through a difficult period last season."
Head coach Siewert added: "I am very happy that Mark has committed his future to us. He is rightly a well-respected figure around the club and he is become an important part of my coaching team."