The versatile 23-year-old enjoyed an impressive debut season after signing from Southampton in September.
Jones made 39 appearances in all competitions in the centre of defence or holding midfield, and has always said he does not yet have a preference as to where he plays.
He finished the season as a mainstay of the back four, partnering Ian Greaves at centre-back for the final 15 matches as the Tigers won the League One title.
Coach Grant McCann expects Jones to continue improving, and is pleased it will happen in East Yorkshire.
"We’re delighted to tie Alfie down on a longer deal," he said. "Alfie’s performances have been at a consistently high level since joining the club.
“With him being in the option year of his contract, it was important we got him signed up for longer. I’m looking forward to working with him over the next few years and I believe he will only get better and better.”
Support The Yorkshire Post and become a subscriber today. Your subscription will help us to continue to bring quality news to the people of Yorkshire. In return, you'll see fewer ads on site, get free access to our app and receive exclusive members-only offers. Click HERE to subscribe.