The contract will see Reynolds with the club until the end of the 2022 season.
FC United currently sit fourth in the BetVictor Northern Premier Division table, and have recorded 13 wins so far this season.
"I just want to say thank you to everyone connected to the club, I didn’t expect it when the club said there’s an offer on the table," said Reynolds.
"For me there was no thought of negotiating, just when can I sign it.
"This club means everything to me and in the short time I’ve been here I didn’t think I’d fall so hard for it but I have. I love being manager of the club. We’ve got the best fans, we’ve got great facilities, we’ve got a great set of players, we’ve got a great coaching team. I’ve got the backing from the board and my line manager Paul Smith, and I just want this journey to continue.
"I love every minute of it here at FC United and I still take the relegation personally, I set out to bring the good times back to FC and having the two year extension will help me do just that."