The England u-21 international has made 17 appearances for the Everton first team since joining from Carlisle in January 2020.
Six of those appearances have come this season after he returned from a successful loan spell at PSV Eindhoven last season.
Branthwaite won the Dutch Cup with PSV last season before returning to Everton this term.
The 21-year-old was part of the England side that win the European u-21 Championship this summer.
Upon committing his future to the Blues, Branthwaite said: “The stature of the club, how much of a family it is at Everton and how I just love playing here in front of the fans were key reasons for me signing. To sign this new contract was to show the commitment I have for the club and show how much it means to me to play for Everton.
“Since I joined, I’ve felt a connection with the club. The fans have been really good with me. For the first game I played, the cheer I got when my name was read out just gave me massive confidence to go out there and play my best game.
“Since I got in the team, the fans have shown me real support and that gives me confidence, especially for a young player. I can’t thank them enough.”
Everton's director of football Kevin Thelwell added: "Jarrad is an excellent player with huge potential and his new contract is richly deserved after the way he has played for us so far this season, having gained key experience on loan at PSV last term."
"It is a great boost for Everton to have a young player with Jarrad's talent commit his long-term future to the club."
