The 22-year-old has impressed for United this season after a string of injuries at Old Trafford handed the defender his chance.
Varela was the first signing former United boss David Moyes made at the club.
The young defender could make his first cap for Uruguay in their friendlies with Brazil and Peru in March.
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The start of the 2017-18 Premier League season is just around the corner and is shaping up to be one of the most competitive yet.
As always it is the so called “big clubs” that have splashed the most cash in the transfer window so far this summer. Manchester United or City? Arsenal or Tottenham? Who are the winners and losers of the transfer window so far?