Fofana is yet to feature for Leicester this season after breaking his leg in a pre-season game against Villarreal back in August.
He has recently returned to full training and is expected to return to competitive action in no time.
The 21-year-old was one of the revelations of the 2020/2021 season following a summer move from Saint Etienne as he made 38 appearances across all competitions to help Leicester win the FA Cup and finish fifth in the Premier League.
"Leicester City defender Wesley Fofana has signed a new deal with the Football Club, keeping him at King Power Stadium until at least 2027," Leicester signalled in a statement published on the club's official website.
"The 21-year-old joined City from Saint-Etienne in October 2020 and featured for the Foxes 38 times in all competitions last season, helping the Club to its first-ever Emirates FA Cup trophy.
"Such were the level of his performances in his debut season for the Football Club, he became quickly established as one of the most exciting young talents in world football and following an injury suffered in pre-season, he is now close to a return to the squad."
"I'm really happy to sign a new contract," said Fofana.
"It shows the club have confidence in me offering me a contract to 2027. I'm really happy to be here.
"It's my club, I love the fans, so I'm really happy and really looking forward to being back playing."
Fofana is third player to sign an extension at Leicester in recent weeks after James Justin and Ricardo Pereira.
