Hanson, whose contract was due to expire at the end of this season, has now signed up to City until the start of July 2017.
Following the club's promotion into League 1 last summer, Hanson has continued to be an integral part in Bantams boss Phil Parkinson's plans for the season.
After netting 15 times during City's amazing 2012/2013 campaign, including vital goals in the club's Capital One Cup and Play-Off campaigns, Hanson has already scored on six occasions for the Bantams this campaign.
Hanson's most recent goal for City - the opener in the Bantams' 2-2 draw at Preston North End last month - was his 57th for the club.
The 6' 4'' powerhouse, who turned 26 earlier this month, is also City's longest-serving outfield player after originally joining the Bantams from Guiseley back in 2009.