The new deal will keep the 26-year-old at the club until the summer of 2012.
“The manager told me I still had a big part to play here and when you’re not playing it is reassuring to hear that,” Pugh told the Stoke Sentinel.
“I’m confident I do have a part to play and can get back into the team on a regular basis, even though we have such a big squad.
“I wouldn’t say I had to think long and hard about signing a new contract, but obviously it is frustrating when you’re not playing as much as you would want.
“Signing a new contract has given me a little boost to keep on working hard and to keep on aiming to get into the team.”