The Wales Under-21 international progressed through the academy at St Mary's Stadium and has made four appearances for the first team this season.
Having seen prospects of further appearances for Ronald Koeman hampered by injury this term, Isgrove now remains under contract until 2017.
"It's a bit of security. I'm 22 now so obviously this takes me to 24. It won't stop me working hard and pushing in training," he told the club's official website.
"That's a good age to be playing at a high level.
"It shows that they believe in my abilities. They want me on a two-year instead of doing the one-years that I've previously done before, which is only positive for me.
"It's probably the biggest two years of my career so far. If I can get a run of games, I can really push on and really establish myself as a professional player."
Isgrove joins fellow academy products James Ward-Prowse and Jason McCarthy in agreeing new terms with the club in recent months.
