The new deal will keep the 27-year-old with the Magpies until the summer of 2016.
Williamson told the club’s official website: “Playing in the Premier League with a club like Newcastle has been a dream for me, and I was delighted to agree a new contract to continue doing that until 2016.
“I’ve played in the lower leagues before, so to get the opportunity to play at St James’ Park every other week – and grounds like The Emirates and Old Trafford – is fantastic for me.
“Me and my family have settled here quickly and it’s great to know that we’ll be staying here for a long time to come.”
Hughton added: “Mike has been outstanding for us since he came here. He was somebody who I tracked for a while before we got him, and he has perhaps exceeded even the expectations we had of him.
“He has a brilliant attitude and in my opinion has been one of the best English centre-backs in the league this season.
“And I thoroughly believe that his best years are yet to come, so we’re thrilled to have agreed the new contract.”