The new deal will keep the 18-year-old at Craven Cottage until the summer of 2015, with an option for the club to extend by a further year.
Frei made his first team debut for Fulham in July 2011 in the Europa League.
“I am delighted that Kerim has committed his future to Fulham,” Fulham boss Martin Jol told the club’s official website.
“Coming here as a youngster and progressing through the ranks is a great achievement.
“He listens and works hard on the training pitch, and his improvement since I started has been very impressive, so much so that I now consider him very much part of the First Team squad.
“As long as he continues to progress and work hard, he has a very bright future ahead of him.”
