The 20-year-old signed for the Potters from Egyptian giants Al Ahly last summer and enjoyed an impressive debut season in England, contributing one assist in 18 appearances.
Ahead of Stoke's first game of the 2017-18 Premier League campaign against Everton on Saturday, the club have announced that the Egypt international has penned a new long-term deal.
"I received a friendly and good welcome from everyone at the club, including my teammates and the management team in my first season," Sobhi told the club's official website. "Thanks to the fans for the support they gave me throughout last season.
"I'm delighted to be signing this contract. I'm proud to be part of this club and I'm determined to repay Stoke City for the faith they showed in me in signing me at just 19. Last season was good but I am confident that the best is yet to come. Shukran."
Sobhi has won 16 caps for the Pharaohs and was a key member of the squad that reached the final of the Africa Cup of Nations in Gabon earlier this year.