The England Under-19 international broke into the first team during the 2013-14 season, making eight appearances in all competitions under Mauricio Pochettino.
Pochettino departed for Tottenham earlier in the close-season, to be replaced by Ronald Koeman, and the new manager has rewarded Reed with new terms that will see him remain at St Mary's Stadium until 2018.
"I'm over the moon to sign for this club for the next four years," Reed told Southampton's official website.
"I want to be at this football club because it's only going forward and is going to keep pushing on, so I'm already looking forward to the future.
"I've really enjoyed the three weeks that I've been with the new manager and his coaching staff, so I'm looking to continue working on my game now.
"The quality of the training that the manager has put on and the ambition that he's showing played a big part in my decision.
"The manager wants us to perform just as well and even better than last year, so I can't wait to play a part in that."
Koeman, meanwhile, was delighted to have Reed signed on for the next four years, especially after Rickie Lambert, Adam Lallana and Luke Shaw all departed St Mary's Stadium during the off-season.
"This is very good news," he said. "I think it is a positive signal to everybody that we have secured Harrison for another four years.
"We would like to keep all our good young players at Southampton, so I am very happy to be able to keep him here.
"Harrison has had some chances in the friendly matches this summer and has impressed me in those, along with the training sessions where he has shown his quality.
"He has good qualities and is a big talent. We know that he will develop himself even more as we progress, and will become a great player."
