The 18-year-old has enjoyed a tremendous first season with the Cobblers - including scoring at Anfield in the Carling Cup defeat of Liverpool - and had been linked with a move away.
But he has now signed an improved 18-month deal which ties him to his hometown club until at least the end of the 2011/12 season.
He said: "I've been talking to the club for quite a while so it's good to finally get it signed and done.
"I didn't think I would play half as much as I have this season but I intend to kick on and keep improving.
"People mention moves to you but I am happy here until I hear otherwise, I want to be playing in the Championship or the Premier League in the next five years and I think I have the ability to do that."
Source: PA
Source: PA