The 20-year-old only joined the Canaries in January of last year, but he has now put pen to paper on a new contract that will keep him at Carrow Road until 2021.
Maddison has spent much of his Norwich career so far out on loan, but the youngster made his Championship debut against Preston North End in April of this year and marked the occasion with a goal.
"I'm delighted. It's something we've talked about and I'm happy to sign on the dotted line. Last season was a big learning curve for me. Obviously I went on loan for half of it and then came back. Alan Irvine took me under his wing and I made a few appearances and I've only been looking forward since then," he told the club's official website.
"I know we've got a lot of talent in the squad – especially in the position I like to play. So it's about me getting my fitness up and showing what I can do and what I can bring to this squad, especially with the new manager.
"I've never worked under a foreign manager before and I've really taken to it well, and am really enjoying it. It's been double sessions and long days, but we've had the balls out early doors and I'm thoroughly enjoying it."
Manager Daniel Farke added: "It's a great decision. It's good for him and good for the club. He's a nice guy who has a lot of potential – he can spot key passes on the pitch and is creative and a technically good player.
"He has so much potential and I'm really looking forward to working with him and we will try to develop him a little bit more. There will be a lot of competition to get into the starting XI, but his great potential means it's up to him to use this opportunity."
In all, Maddison made three appearances off the bench towards the end of the last Championship season, all of which ended in Norwich victories.