The new three-and-a-half-year contract will keep the 21-year-old with the Albion until the summer of 2015.
The new deal also includes a further year’s option in the club’s favour.
West Brom boss Roy Hodgson said: “Speaking not only personally, but on behalf of everyone at the club, we are all very happy Craig has committed his long-term future to the club.
“Since he joined up with the team at the start of the season he has been very impressive, both in training and games.
“We believe he has got a very bright future as a Premier League player and it’s nice that Premier League future is going to be with West Bromwich Albion.”
