The 20-year-old, who spent last season on loan at Sheffield United and Rangers, has made just one competitive appearance for Arsene Wenger's first-team.
However, with the Gunners having failed to land a big-name signing at centre-half so far this summer, Bartley may feature in the Frenchman's plans.
Loan spells have no doubt enhanced the youngster's experience, having taken part in a relegation battle with the Blades and two Old Firm derbies last year.
A club statement, which failed to disclose the length of the new terms, read: "Everyone at the club is looking forward to Kyle's continued contribution and development."
Bartley's sole competitive Gunners appearance came against Olympiakos in the Champions League in 2009, but he participated in the Emirates Cup last month.
He has captained Arsenal's reserves and was an FA Youth Cup winner with the club in 2009.