The 17-year-old forward's first professional contract with the Championship outfit penned earlier this year was due to run out in 2014.
"The club has plenty of belief in its young players," Academy Manager Mark Lillis told Huddersfield's official website. "It shows the club's confidence in Jake to offer him a new contract and he now has time to develop here as a young footballer.
"Jake has set off this season really well, but he is still learning the game and he will continue to listen and develop. He is playing in the 'number 10' role at the moment, which he has adapted to really well and scored a few goals from, including a hat-trick at Sheffield Wednesday.
"He is maturing as a person away from the football pitch and he has become a bit of a character, which is good. If and when he starts to step up to the U21s and first team, he will need to show his personality if he is to handle the environment."
Charles, who joined Huddersfield's academy at the Under-11 level, has yet to make an appearance for the club's first team.