Hudon gets a raise with the new deal after making $650,000 last year. He was scheduled to have an arbitration hearing on Aug. 2.
The forward played 32 games last season and scored three goals and two assists.
Hudon, 25, has 13 goals and 39 points in 110 career NHL games, all with the Canadiens.
The Alma, Que., native was Montreal’s fifth-round pick in the 2012 NHL Draft.