Manuel Gulde has signed a new two-year contract at Hoffenheim, keeping him at the club until 2013.
The 20-year-old defender, who is highly regarded in Germany, was set to see his current deal expire in the summer.
Hoffenheim were keen to avoid seeing him drop into the free agent market and have moved quickly to tie him down on fresh terms.
General manager Ernst Tanner is delighted to have reached an agreement, allowing the club to retain the services of one of their hottest prospects.
"We are pleased to have signed a new deal with one of our biggest home-grown talents," he told the club's official website.
"We hope Manuel Gulde can steer clear of injuries so that he is able to show that talent on the pitch in the years to come."
Gulde added: "I am more than just happy. The club offering me new terms after all my injury problems is a great sign of the trust they have in me. I am thankful for that."
The youngster, who has made just one Bundesliga appearance this term, is currently sidelined with a groin problem.