Bracewell, the nephew of former internationals John and Brendon Bracewell, made his debut in March in the one-day series against the Netherlands
Michael Bracewell's rise in New Zealand cricket was confirmed on Friday as the Wellington all-rounder was offered his first national contract, while white-ball specialist James Neesham missed out.
Bracewell, the nephew of former internationals John and Brendon Bracewell, made his debut in March in the one-day series against the Netherlands and was included in last week's Test squad to play England in June.
Fellow all-rounder Neesham, who has recently fallen out of favour with selectors, was one of only two players to drop out of the list of 20 contracted players, the other being retired batsman Ross Taylor.
Central Stags spinner Ajaz Patel, who became the third bowler to take 10 wickets in a test innings during the India tour in December, has returned to the contracts list.
"Michael’s been consistently performing on the domestic circuit for seasons now and we certainly see him as an international prospect in all three formats," head coach Gary Stead said in a statement.
"It’s great to see Ajaz back on the list after narrowly missing out last season.
"His value as our leading red-ball spinner is clear and we're excited to see the role he could play in the Test team going forward."
World Test champions New Zealand start a three-Test series against England at Lord's on June 2.