John, 21, joined Everton aged six and has worked his way through the club's Academy ranks.
John has established himself as a key player for Everton Under-21s in recent years and also trains regularly with Frank Lampard's side. The defender was also part of matchday squads for the Blues' Premier League games against Southampton and Manchester United earlier this month.
"Kyle's progress with us from the age of six has been clear and consistent – and we're very pleased to be able to help him continue his journey towards first-team football," Blues chief Kevin Thelwell said.
Reacting to his new deal, John was quick to point to the fact that Blues boss Lampard has a track record of giving young players a chance and revealed he has particularly benefited from the guidance of captain Seamus Coleman.
“I'm so proud to sign this contract for this great club," John told evertontv. “I'm looking forward to continuing to work hard and getting to where I need to be.
“With Frank Lampard as the manager, he likes to bring young players through, and I like the way he plays.
“I've been here for a long time and Everton means everything to me. It is like home. I'm committed to giving everything I can to give back to the club. This season, I'd like to make my first-team debut and get some minutes. That's my goal."
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