The English shot-stopper returned to Villa Park on January after being loaned to Charlotte Athletic.
A youth product of the Championship side Norwich City, Steer broke into the senior team in 2010. He was subsequently loaned to Yeovil Town and Cambridge United before joining the Lions in 2013.
Steer made just two appearances during his spell at the Canaries.
Upon joining the Lions, the goalkeeper struggled to retain his place in the main team as he was recurrently loaned to the club Huddersfield Town.
Steer was called back to his parent club to replace the injured Orjan Nyland and provide a back up for the newly acquired Lovre Kalnic.
And with Kalnic getting injured, Steer earned the right to be the first choice goalkeeper.
Due to his impressive display, the club has now decided to keep the English man till the end of the next season.
Dean Smith’s side gained the momentum with four wins in a row after a slight dip in form since the turn of the year.
As a result, the Lions escalated to sixth in the Championship table.
Jack Grealish after returning from the injury is turning out to be to the key player for his side. The midfielder played a huge role in Villa’s recent success. Furthermore, he was awarded the captain role by the manager Smith.
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The Lions will face Blackburn Rovers in Saturday’s Championship clash.