The new deal will keep the 20-year-old at Rangers until the summer of 2014.
“Signing a new deal is a massive thing for me and I’m absolutely delighted,” Hutton told Blue News.
“This season I have been happy with the way things have gone and I have been given the chance to play in really big games.
“My goal after that was to keep going and try to get an extension so that I can stay at the club.
“I have that now and I am over the moon.”
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Liverpool have unveiled their new home kit for next season, sticking with the hugely popular retro styling of the current shirt.
The reputation of the Premier League means it is the most popular and one of the most watched leagues in the world.