"At the end of the day, for myself I feel comfortable here. I was speaking with the Joint-Chairman David Sullivan and everybody and felt like I was valued here. He was clearly very committed to getting the deal done and keeping me at the Club, so I'd like to thank him for that and I'm delighted to sign for the next six years.
"My family are happy living here too. We've been part of the Club living in London, so we weighed all the factors up and I'm delighted to be staying here."
Yesterday Allardyce joked about bringing in Jack Bauer, a torturer of television show '24' fame, to conduct the negotiations.
"Winston has an exceptionally good offer on the table," Allardyce told Skysports.com. "But he won't make a decision to reject it and say, 'no, I am not staying' or 'yes, I will take it and I will stay'. We cannot get a decision out of him.
"Unless we torture him - we could do cocktail sticks under the nails or ring up Jack Bauer and I'm sure he could get the answer out of him."
Reid has become an integral member of West Ham's defence since joining the London side from Danish team FC Midtjylland in 2010, making 131 appearances and scoring six goals.
The defender has made 27 appearances this season to help West Ham into the top half of the Premier League table, though they are without a win in five games ahead of Thursday's clash with leaders Chelsea.