Having joined from Ulster Bank League club Lansdowne, the former Gonzaga College pupil made a huge impact with the Connacht Eagles in his first year at the Sportsground and was awarded the 'A' Player of the Year award at the end of season awards dinner in May.
Healy has played in all but two games for Connacht this season, the most recent of which was the 33-6 Heineken Cup victory over Zebre in Parma last Saturday afternoon.
The 23-year-old also sits top of the try-scoring charts with tries against Zebre and Cardiff Blues in the opening two rounds of the PRO12.
Healy was capped nine times for the Ireland Under-20s, playing in the 2009 U-20 Six Nations and IRB Junior World Championship.
Commenting on his new contract with the westerners, Healy said: "I'm delighted to have signed with Connacht for another two years. Obviously I got the chance to come down here the summer before last and that was huge for me.
"So, for Connacht to extend the opportunity really fills me with confidence. I'm enjoying my rugby and really enjoying working with Pat (Lam) and the coaching staff here.
"With the squad that we have now and all the good work being done behind the scenes, Connacht is an exciting place to be. I'm certainly very happy to be a part of it."
Connacht head coach Pat Lam added: "When I first worked with Matt in pre-season, I was impressed by what he could do. His attitude and willingness to learn and be better is exactly what we look for in a Connacht player.
"He has shown in his performances to date what he can do with his skill-set and he has some special talents.
"He has so much potential and I believe that with his attitude, he can reach his goals if he continues to put the work in. I'm delighted that he wants to be part of the growth and vision of Connacht Rugby."