The new three-and-a-half year contract will keep the 18-year-old at Villa until the summer of 2014.
“I set my heart on playing for Villa a long time ago and words can’t describe how I feel,” he said.
Villa boss Gerard Houllier said: “Gary is a young player with potential and a desire to succeed and the contract he has just signed is a sign that we trust him to be a player for the future.
“We’re delighted that Gary has joined players such as Marc Albrighton, Barry Bannan and Ciaran Clark who have all signed new deals recently and we are encouraged by their progression.”
