Reid’s original contract with the Hammers was due to run out at the end of the season, with The Sun reporting that both Liverpool and Tottenham Hotspur were interested in the New Zealand international centre-back.
The Sun also reported that former Midtjylland star Reid’s new deal is worth £19.5m over six-and-a-half years.
McInally believes that West Ham’s decision to tie down Reid to a long contract is a good one, and has explained how the club are actually saving money by doing so.
“It is great news,” the 52-year-old told Sky Sports’ Morning View show on Thursday. “I actually thought that he would be leaving the way (manager) Sam (Allardyce) has been talking. He is a fantastic defender and has done really, really well. It is good news for West Ham.
“(He has saved) the money they would have to shell out to buy a new centre-half who has experience and has done well elsewhere. If they want to sell him now for whatever reason, they will be looking for a minimum of £10m.”
Reid has been on the books of West Ham since 2010 and is rated as one of the better centre-backs in the Premier League.
The defender knows English football inside out and fully understands the ambition of the London club.
Had Reid left in the summer, then West Ham would have had to look for a replacement, which would have taken time and cost transfer fee.
It was indeed sensible of West Ham to increase the salary of a player they know so well and value so much instead of taking a gamble of a new one.