The 21-year-old, who joined the Bees from Everton last summer, has agreed a deal that will keep him at Griffin Park until 2016.
Brentford sporting director Mark Warburton is pleased that Forshaw has committed his future to the League One side.
He told the club's official website: "This is another signal of the long-term commitment being demonstrated by both the club and individual players.
"We are delighted that Adam recognises the potential at the club. Likewise, it is important that the club recognises and rewards the consistent level of performance displayed by Adam over the last 12 to 18 months.
"The offer of an extended contract gives him the peace of mind to focus solely on his continued development as a player."
Forshaw scored three goals in 53 appearances last season.