The 19-year-old forward joined the Toffees from Charlton Athletic in January and went on to make eight league appearances, netting his first goal against Manchester City in January.
He stated that he is enjoying and adapting to life in Liverpool and wants to move forward by securing regular playing time next season.
“It’s been great but I can do more, I can do better,” Lookman told club’s website.
“There are things that I can still improve on, which I’m focusing on.
“It was an incredible feeling to score against Manchester City. I can’t really describe it. I need to kick on from that now and move forward.
“It’s good to have moments like that, but I want to have 100 more moments like that in my career. That’s what I’m trying to do.
“It’s a whole different city [Liverpool compared to London] but I think I’m adapting well. I enjoy playing every single day.''