The new deal will keep the 22-year-old with the Blaugrana until the summer of 2018.
He told the club’s official website: “I’m very happy to have renewed. It’s a dream to be able to stay for so many more years at this club.
“I hope things remain as good as they are and that I can get to play. I’ll be taking all the chances the boss gives me and trying to do my best.”
Tello has been linked with the likes of Manchester United, Liverpool, Arsenal and Tottenham in recent months.
