The England international has committed his long-term future to the Toffees after an impressive 2013-14 campaign that saw him feature regularly in the Premier League
The England international was a something of a revelation during the 2013-14 campaign, featuring 26 times in total for Roberto Martinez's side before forcing his way into Roy Hodgson's plans for the 2014 World Cup.
The former Barnsley youngster was eventually selected on the standby list, narrowly missing out on a place in the final 23, but he is determined to improve and insists that the Toffees are targeting a top-four finish this season.
Speaking to the club's official website, the 20-year-old said of his new deal: "I am over the moon. It's just been such a great last season and to get pen to paper on a new deal is a dream come true.
"The last 12 months have been so enjoyable thanks to the faith that the manager has shown in me and all the players. What we achieved was unbelievable. It was a very memorable season and hopefully there's more to come.
"I'm learning off [Phil] Jagielka, [Sylvain] Distin and [Antolin] Alcaraz every day. I'm getting better, stronger and wiser. We want to better ourselves this season. We are aiming for the top four."
Toffees boss Martinez added: "It is an important signing for the club and a really good reward for a young footballer with a fantastic future. He had an excellent season in 2013-14 and it's really good news all round.
"It is very important that we continue to let our youngsters continue to develop into bigger roles."