The 23-year-old winger was set to be out of contract next summer but will instead remain with the south Wales outfit until the summer of 2014.
The former Southampton man was a key figure in the Swans' promotion charge last term, securing the Supporters' Player of the Year award.
And he has started the new season in a similar vein, winning the man-of-the-match award in the goalless draw with Wigan, and Dyer admits agreeing a new deal was straightforward.
"I'm really pleased. We've just got to the Premier League and I want to be part of things," he said.
"It's a great club so I'm happy to be here. Talks went well and it was nice and easy to sign a contract.
"We've made massive strides as a club and I don't see why I should want to go anywhere else. I can learn my trade here and keep improving as a player."
Dyer joins Ashley Williams, Andrea Orlandi, Angel Rangel, Joe Allen, Neil Taylor, Garry Monk and Tom Butler in agreeing a new deal, and he is hopeful that an encouraging display against the Latics on Saturday is a taste of things to come.
"I think we will do well this season," said Dyer. "First off, we wanted to achieve our Premier League status and now we want to stay there.
"The rest is about progressing as an individual and hopefully I will keep pushing myself and become a better player."
Source: PA
Source: PA