The 20-year-old is now keen to become a regular under new manager Brendan Rodgers.
He told the club’s official website: “I am really happy. Last season I was itching to try and push for a new contract. Now it’s happened and I am ready to kick on again now.
“It’s lovely to know I am in the plans for the future. At the moment, it’s just about getting things right each day and proving myself to the gaffer here. The gaffer and his way of playing will suit me down to the ground and hopefully I can be in his plans.”
He added: “I think going away to Blackpool helped me a lot. It gave me some experience, I scored some goals and I came back a better player. Kenny (Dalglish) gave me a chance towards the latter stages of the season and I thought I showed what I can do.
“Tactically I have become a lot better and technically too. When you’re working with people like Steven Gerrard and people like that, you’re learning things day in, day out and it’s an honour.”
Shelvey insists he still has plenty of room for improvement.
He said: “There are still things in my game I want to work on and I’m going to keep doing that. On the physical side of my game, I’m going to be in the gym every day – and I’ve got to speak to the gaffer to see what else I can work on.
“I want to get into the first team and be in the starting XI on a permanent basis. That’s going to be hard, but it’s something I’ve got to work towards.”