The 19-year-old, who can also play in midfield, has put pen to paper on a new two-and-a-half-year deal at The City Ground.
"We're delighted with the progress he has made this season," Forest chief executive Mark Arthur told the club's official website.
"He's from Nottinghamshire and wants to be a part of what boss Gary Megson is looking to achieve and we're thrilled he has pledged his future to the club."