Two function Reset button - long/short press

It can be done with one button, one resistor, one capacitor and one GPIO pin (in addition to the RESET pin):

^{simulate this circuit – Schematic created using CircuitLab}

Pressing the button causes a LOW pulse on the RESET pin (in the exact same way as the USB interface does).

During your startup procedure you read the GPIO pin you have chosen. If it's LOW the button is still being pressed in. If it's HIGH it has been released.

If you are using an Arduino with the normal bootloader the bootloader itself imposes a 2 second delay (which may be enough for you). Alternatively you will need to have your own delay in your program before reading the button to ensure that you have plenty of time to release the button so you don't accidentally reset your settings.