The 27-year-old, who has helped City win two Barclays Premier League titles, has now committed to the club until 2019.
He follows team-mates Vincent Kompany, David Silva, Sergio Aguero, Samir Nasri, Edin Dzeko and Aleksandar Kolarov in agreeing fresh terms this year.
Hart, who has also won the FA Cup and Capital One Cup with City, said: "The club's doing amazing things at the moment, we've created history and we want to keep doing that.
"I just want to keep winning with the team and keep developing
A lot of the boys have signed long-term deals, so we're building as a squad and I think that quite a few of us have been here for a long time now.
"We're enjoying building that winning mentality, how the club is growing is around us and how we need to grow along with it."
Hart is now firmly re-established as City's first-choice keeper after an indifferent spell that led to him being dropped by manager Manuel Pellegrini last autumn.
His form was much improved in the second half of last season and he seems to have responded further to a fresh challenge this term following the summer signing of a new deputy in Willy Caballero.
Reflecting on his time out of the side, Hart told City TV: "That's football
I don't look back like it is in the past, it is all relevant
It is all part of what is going on, there is definitely a journey here.
"To be in this first team you have to be at your highest level and I fully appreciate and understand that."
Pellegrini hopes midfielder James Milner, who is out of contract next summer, will be the next high-profile player to agree a new deal.
Reports in the week claimed talks between the club and Milner's representatives had stalled but Pellegrini is confident a deal with the 28-year-old is close.
He said: "We are talking with James
It is not easy for all the players to sign a new contract
There are a lot of things to talk, to decide, discuss
I hope finally James will sign his contract.
"The same as with Joe Hart - he wants to stay and the club wants to keep him."
City's main challenge in the Premier League this term seems to be to overhaul Chelsea.
The Londoners remain title favourites despite seeing City take a sizeable chunk out of their lead over the past month.
Chelsea are expected by most observers to kick on but Pellegrini remembers well how Arsenal, leaders 12 months ago, faded.
He said: "I think Arsenal last season had a very similar number of points last season as Chelsea have now at this moment.
"So we'll see what happens in the second half (of the season) and how many points you need to win."
Source : PA
Source: PA