The popular 33-year-old defender, named both the Players' Player and Supporters' Player of the Year last season, will remain at Loftus Road until the summer of 2013, with the option of a further year.
Hill said on www.qpr.co.uk: "I'm absolutely buzzing. As soon as I found out that Mark Hughes wanted to keep me for at least another year, staying here was the only thing on my mind. It was a straightforward decision to stay. I love playing here and I love playing at Loftus Road. It's a great ground."
Hoops boss Mark Hughes yesterday continued his building plans for next season with the double signing of striker Andy Johnson and defender Ryan Nelsen, who will join up at the start of July when their contracts at Fulham and Tottenham respectively expire.
Hill believes the future is bright for QPR, after they secured another season in the top flight on the final day, despite a last-gasp defeat at champions Manchester City, and are now under solid leadership following a boardroom takeover.
He added: "I've seen the plans for the future and the new training ground it's an exciting time to be here. I'm really looking forward to the challenge.
"Hopefully I can now try and get a few more games under my belt and next season will see us progress even further as a club.
"New players are coming in and it's an exciting time for everyone connected to the club.
"I just want to try and give the gaffer a headache.
"I don't know what the starting eleven's going to be, but I'm willing to rise to the challenge again and make it hard for people to take that place off me."
Source: PA
Source: PA