James has made 18 appearances in all competitions so far this season, with the prospect's attacking threat and crossing ability have been compared to that of David Beckham by former Blues' forward Pat Nevin.
Alongside young stars like Tammy Abraham, Mason Mount and Callum Hudson-Odoi, the 20-year-old is considered one of the top promises at Stamford Bridge.
"Being injured at the start of the season was tough and then I slowly got back into it and I was given my chance against Grimsby, scoring on my debut was great, and ever since then I haven't really looked back", he added."We started talking about a new contract about two months ago".More news: 11 million deaths: Sepsis linked to 1-in-5 deaths worldwide
Reece James' new five-and-a-half-year contract at Chelsea continues a story of success for English youngsters under Frank Lampard.
"I always wanted to be here and another five and a half years mean a lot to me and my family". The England U21 worldwide also netted the 4-4 leveller in Chelsea's thrilling Champions League clash with Ajax at Stamford Bridge last autumn.More news: Villa striker Jonathan Kodjia close to Al Gharafa switch
James (right) is one of several young homegrown players to have thrived in Frank Lampard's first season in charge at Stamford Bridge.
'Reece started his football education with us at the age of six and his performances on loan at Wigan last season paved the way for a strong beginning to his career in the Chelsea team.
"We are very pleased that he now has the ideal opportunity to build on this and to be an important player for us for many years to come".More news: Moyes targets reinforcements but won't discuss reunion with Chelsea midfielder Barkley
James and Chelsea are back in action on Saturday, when they visit Newcastle United at St. James' Park.