The 21 year-old's new deal runs until the summer of 2019, with Town having the option of a further year’s extension at that point.
Coleman joined the club from SkyBet League One side Oldham Athletic last summer and went on to keep five clean sheets in eight starts and two substitute appearances last season.
On the new deal, Huddersfield Town Head Coach David Wagner said: “During his first year at the club, Joel has shown what a capable young goalkeeper he is.
“He performed very well every time he came into the team, including in a big pressure Play-Off semi-final against Sheffield Wednesday , and we’re delighted to have his future secured to the club for a long time.
“Joel still has a lot of space to improve and that is what he must continue to do, in every training session and in every game.”