A liquid state machine (LSM) is a biologically plausible model of a cortical microcircuit. It exists of a random, sparse reservoir of recurrently connected spiking neurons with fixed synapses and a trainable readout layer. The LSM exhibits low training complexity and enables backpropagation-free learning in a powerful, yet simple computing paradigm. In this work, the liquid state machine is enhanced by a set of bio-inspired extensions to create the extended liquid state machine (ELSM), which is evaluated on a set of speech data sets. Firstly, we ensure excitatory/inhibitory (E/I) balance to enable the LSM to operate in edge-of-chaos regime. Secondly, spike-frequency adaptation (SFA) is introduced in the LSM to improve the memory capabilities. Lastly, neuronal heterogeneity, by means of a differentiation in time constants, is introduced to extract a richer dynamical LSM response. By including E/I balance, SFA, and neuronal heterogeneity, we show that the ELSM consistently improves upon the LSM while retaining the benefits of the straightforward LSM structure and training procedure. The proposed extensions led up to an 5.2% increase in accuracy while decreasing the number of spikes in the ELSM up to 20.2% on benchmark speech data sets. On some benchmarks, the ELSM can even attain similar performances as the current state-of-the-art in spiking neural networks. Furthermore, we illustrate that the ELSM input-liquid and recurrent synaptic weights can be reduced to 4-bit resolution without any significant loss in classification performance. We thus show that the ELSM is a powerful, biologically plausible and hardware-friendly spiking neural network model that can attain near state-of-the-art accuracy on speech recognition benchmarks for spiking neural networks.