The 26-year-old is the club's longest-serving player and has now made 113 appearances for the Reds.
Hodson originally graduated to the first team from the Centre of Excellence and reserves to make her debut in April 2014. She made 11 appearances in a season where Liverpool clinched their second Women's Super League title under Matt Beard, who recently returned to the club.
She overcame serious injury to return to the senior set-up and showed her versatility last season by making appearances at full-back, as well as in her more typical wide attacking position.
LFC Women manager Beard told Liverpoolfc.