The 23-year-old former Leyton Orient goalkeeper's new contract sees him at Dean Court until 2018.
Allsop made his top-flight debut in Bournemouth's first Premier League campaign, and is now targeting more regular first-team action with the Cherries.
"I am really pleased to have it sorted," said Allsop.
"It's a weight off my shoulders to get it over the line. I love living in Bournemouth and love the club, so I am delighted to be staying for another two years.
"To make my Premier League debut was massive, but that has just given me a taste of it. I want to play as many games as I can at the top level.
"I have learned loads from Artur Boruc and Adam Federici this season, but I don't want to just make up the numbers. I want to push as hard as I can."