The 19-year-old has made his breakthrough into the Reds' first team this season under manager Brendan Rodgers, making 14 appearances in the Premier League, League Cup, FA Cup and Europa League.
The former Bradford City trainee, who has represented England from under-16 through to under-21 level, also scored his first goal for the club in a 5-3 victory against Young Boys in the Europa League in September.
"It's a great honour to sign a new contract at the club and I'm very happy. It was an easy decision to make - as soon as they offered it to me, I grabbed the opportunity with both hands because it's a great club and I just want to continue to play for Liverpool," he told the club's official website.
"I am happy with the progress I've made so far and hopefully I can progress more in the second half of the season and continue to keep playing.
"There's still so much hard work ahead. There is big competition within the team and everyone wants to play football. I just hope I can keep progressing and continue in the way I have been."
Liverpool Managing Director Ian Ayre added: "He's a great young player, shown a fantastic improvement, broken into the first team and made a huge contribution - and rightly so, we've provided him with a new contract and a long-term one.
"Getting talent like him, Raheem [Sterling] and others to commit at this point is absolutely essential to the future.
"The manager, the owners and everyone have said the key is to build something for the long term - and young players are a catalyst to that. None more so than Andre.
"He's come on leaps and bounds in the last year or so and that's because of all the hard work he's put in and the manager giving him a chance, so it's absolutely essential players like that commit themselves to the club."
