Williams' current contract with the Bantams expires this Wednesday (31 December 2014) but he has now penned a new deal with City to keep him in Phil Parkinson's squad up to 31 January 2015.
With loanee goalkeeper Jordan Pickford not allowed by parent club Sunderland to play in cup competitions for City this season, the 32 year-old's new deal now means the experienced custodian is now line to start Saturday's cup tie at The Den.
His new deal is subject to receiving the standard clearances from The F.A and Football League.
Williams has appeared all five of City's previous Capital One Cup and F.A Cup tie so far this campaign.
Parkinson said: "Ben has not only done well for us as a player but the way he’s trained alongside Jordan (Pickford) and Matt Urwin has been top class.
“Ben is a great character and it is certainly a positive having him remain in the building.”