Hudson-Odoi enjoyed a breakout season last term even though previous Blues manager Maurizio Sarri was reluctant to include him in his starting line-up.
The winger handed in a transfer request last January after Bayern Munich’s failed £35million bid for the up-and-coming England international.
But the 18-year-old has now agreed a five-year deal that promises him over £100,000 a week and came with reassurances from the London club that he will get more time on the pitch.
The BBC claim that throughout the negotiations Hudson Odoi’s key issue was playing time as he only managed to amass 10 Premier League appearances under Sarri last season.
The teenager’s first top-flight start didn’t take place until last April against Brighton after he had already debuted for the England national team.
But the youngster was encouraged by positive words from new manager Frank Lampard, who wants him to remain at Stamford Bridge.
Lampard recently said that the academy graduate can play a key role in his squad as well as for England and become a world-class player.
The club legend said: “I am not going to say things that are pie in the sky but, with his talent, he can be central to this team, he can be central to England.
“He can show, right here at Chelsea, the team he came through the academy at, that he is going to be a world-class player – because I truly believe that.”
Hudson-Odoi is recovering from an Achilles injury he sustained in April but seems set for a quick return by September.
Chelsea aces Mason Mount and Ruben Loftus-Cheek have also signed new contracts since Lampard took over from Sarri.
Hudson-Odoi has been with the Blues ever since he was six years old and played in the youth teams for a decade.
He made his debut for the senior squad in 2017 in the EFL Cup against Bournemouth.
Last season’s impressive performances led to an England call-up and Hudson-Odoi debuted against the Czech Republic.