The 25-year-old joined the Owls from Leeds United in 2014, and has since made 92 appearances, scoring twice.
He played 42 times last season as Wednesday reached the play-off final, which they lost to Hull City.
"I'm really happy here," said Lees. "Like any player, I want to play in the Premier League. I am convinced we can achieve these ambitions together."
Defender Tom Lees has signed a new five-year contract with Championship club Sheffield Wednesday.