Franz, who missed Wolfsburg's opening match of the season through suspension, joined the club from regional neighbours Magdeburg in 2001.
He is delighted to have his contribution to the team rewarded with a fresh deal and believes Wolfsburg are destined for a bright future.
"I am very happy, because in Wolfsburg I have optimal conditions to establish myself," declared the 21-year-old defender.
"We have a young team and a fantastic new stadium and the club have set themselves high aims, there's a lot happening here."
