The 22 year old, a summer signing last year from Peterborough United, will now stay at the Kassam Stadium until the end of the 2012/13 season with the option of a further year.
Speaking to the club's official website after inking the deal the striker said, "It was an easy decision to make because I think this is a forward looking club with great plans for the future. The fans have been brilliant with me since I first arrived and I am very proud to play for them and for the club."
Potter has scored nine goals in 43 starts for the Us.
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