The new deal will keep the 18-year-old at the club until the summer of 2012.
Villa boss Martin O’Neill said: “I couldn’t be more pleased. Nathan is a great talent and has real natural ability.”
He added: “He is ready. He is pushing on very strongly now even though you consider he is still very young.
“He has everything going for him. If he keeps learning, he’s got a really good chance.
“I wouldn’t want to put a great deal of pressure on him but, in terms of natural talent and strength and ability to go past players, I think he’s got it all. The rest is up to him.
“He is a great, great talent and I am absolutely delighted to have him here.
“He has been around the first team. I hope when he gets his opportunity – in the not too distant future – he can grab it.
“I have seen a few players in the past with great, great talent disappear at 21, 22 but I don’t think that’s in his nature.
“He really wants it and I think he has that determination about him. The football club will see the benefits in the next few years.”
