The 22-year-old winger joined Bournemouth from Aberdeen four years ago and helped the Cherries gain promotion from League One in the 2012-13 campaign.
Fraser has scored three goals in his 13 Premier League appearances this season after spending last term on loan at Ipswich.
Speaking about the deal, Bournemouth manager Eddie Howe sad: “Ryan has made huge strides in his development this season.
“He has had to be patient for a regular opportunity here and the next step was to produce performances on a consistent basis. We are seeing that from him now.
“Ryan deserves all the accolades he has received and hopefully there are many more to come. I see a really bright future for him.”
Bournemouth chief executive Neill Blake added: “I am delighted that Ryan has put pen to paper on a new contract.
“He has been a very important player for the team this season, especially in the last couple of months, and has proved he is capable of playing at the highest level.
“We believe in producing and developing young, British talent and look forward to seeing Ryan continue to improve in an AFC Bournemouth shirt.”
