The 23-year-old forward, a graduate of the club’s centre of excellence, returned to action in February after overcoming a long-term cruciate ligament knee injury.
Hodson has played 75 games for LFC Women since breaking into the first team back in 2014 as the Reds secured a second successive Women’s Super League title and has also earned international honours with England U23s.
“It’s great to be back fit and I’m over the moon to sign a new contract,” she said.
“This is the only place I’ve been in my career and I’m delighted to stay. I still need to get some match fitness and as a team we want to get maximum points from our remaining games this season.