The 18-year-old German youth international midfielder has put pen to paper on a three-and-a-half-year deal.
"I am very happy about this new contract because I really like being at Schalke," he told the club's official website.
"In addition there have been two important things for me - the club is putting trust in home-grown talents and it gives me the opportunity to play regularly in Europe even at this point of my development."
Schalke general manager Horst Heldt added: "Max Meyer signing a new contract is great news for our club."
Meyer, who made his league debut in February, has scored three goals in 11 Bundesliga appearances this season.