In eight seasons with United, the 33-year-old Young has made 227 appearances in all competitions, scoring 17 times.
As well as deputising for Antonio Valencia on the pitch, Young has worn the captain's armband in the Ecuador international's absence this season.
Young now joins Chris Smalling, Phil Jones and Anthony Martial on the list of players who have committed to fresh deals at Old Trafford recently, while negotiations with David de Gea remain ongoing.
"We've got players that need some leaders in the dressing room and Ash is one of them, so I'm delighted", said interim manager Ole Gunnar Solskjaer.
Young has re-emerged as an important player for United in receat seasons and was also a starter in the England side that reached the World Cup semi-finals in Russian Federation last summer.