The deal, worth $1.65 million, will pay Prosser $800,000 in the first year and $850,000 in the second, a source told ESPN.com's Pierre LeBrun.
The 25-year-old Prosser has six assists in 23 games for the Wild this season. The Wild are 14-7-2 with the rookie in the lineup, and coach Mike Yeo has praised his poise and ability to implement the new system that has been installed.
The team announced the deal on Monday.
Prosser is viewed as one of the promising young blueliners in the organization. The extension will kick in next season.
Information from ESPN.com's Pierre LeBrun and The Associated Press was used in this report.