The 18-year-old broke into the first-team under Gary Neville last season and is regarded as one of their hottest prospects.
And amid rumoured interest from Manchester United, Villalba revealed on Twitter he’s committed the next four years to the club.
He tweeted: “Very happy to renew four years more with the team of my life.
“It is good to contribute to this great club.”
Earlier this month, the teenager’s agent Vicente Fores, claimed there had been contact with United over a move.
“Just a contact to know his situation,” he told Sport Witness.