The 19-year-old was an instrumental figure for Everton Under-23s as they won last season's Premier League 2 title, having only made his full debut for David Unsworth's side on the final day of the previous campaign.
Unsworth has been glowing in his praise for the teenager and Baningime was rewarded for his terrific form at the start of this season by being invited to train with Ronald Koeman's first team.
After penning a new deal until June 2020, the young Blues' ball-winning midfielder is aiming to become the next Academy talent to be called on by the Dutchman.
“I am very, very happy — thrilled to sign the contract,” Baningime told evertontv. “I have been working so hard for this and I am just glad David Unsworth and his staff have given me this opportunity.
“My ambition is to make the first team but I will have to see what happens. That is my dream, to play in Everton's first team. It has been ever since I came here.