The 18-year-old's contract was set to expire this summer, but he has no put his future to bed amid speculation linking him to Bayern Munich.
Hudson-Odoi has now become a starter under Frank Lampard since returning from his long-term Achilles injury, and has been heavily praised by those round the club including former Blues goalkeeper Rob Green.
After a successful start to the season, Hudson-Odoi reflected on signing a new deal and insisted it was the right decision to make.
"The club have done so much for me and I'm so thankful for that. The decision that I made was a very good one for me and my family.
"We all thought that it was the right club to be at. I've been here all my life, so there's no need to change yet.
"We had a slow start but picked up really well. The camp is more buzzing because we have an ex-player back as manager. It's a great feeling for us.
"We're all enjoying our football at the moment, happy and smiling. It's a great vibe, everyone wants to be there," the 18-year-old forward continued.
Unfortunately for Hudson-Odoi, he was unable to make the cut for Gareth Southgate's England side, but with another international break in November, he will be hoping to impress in the mean time to get a chance of consideration next time round.