The 24-year-old has put pen to paper on a new two-and-a-half-year deal, tying him to the club until June, 2020.
Hoskins was signed by Chris Wilder in the summer of 2015, joining the club on a free transfer after leaving Yeovil Town.
The attacker, who began his career at Southampton, has been a key player under a series of different Town managers, and has clearly also impressed Jimmy Floyd Hasselbaink.
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“We are really pleased to have secured Sam’s future,” said the Cobblers boss.
“He has some fantastic attributes, he has pace to unsettle players, he is direct and he is a threat to defences.
“I have seen plenty of potential with Sam, and I know he can continue to improve further.”
Hoskins has endured a difficult year, suffering a cruciate knee ligament injury in January that saw him out of action for nine months.
He returned to action in September, and although he has missed the past few weeks with a hamstring strain, he is expected to return to the first team squad for Saturday’s Checkatrade Trophy clash at Portsmouth.
Hoskins’ determination to recover from that serious knee injury is something else that impressed Hasselbaink.
“Sam has also shown what a fantastic attitude he has to the game,” said the Town manager.
“He works very, very hard to get better, to get stronger and that desire is very important.
“As with Shaun McWilliams recently, we are delighted to secure the services of a very good young player who we believe will get better and better and be an asset to the club.”
In all, Hoskins has made 43 starts and 36 substitute appearances for the Cobblers, scoring 12 goals.