Steele signed a contract committing him to the Teessiders until 2015 yesterday morning to end mounting speculation over his future.
The Newton Aycliffe-born 20-year-old had been due to enter the final year of his existing deal at the end of the season, alerting Premier League clubs to his possible availability next summer.
Aston Villa and Arsenal had both been linked with the youngster, who has cemented a position as Boro's firstchoice goalkeeper since making his first-team debut in August's Carling Cup win at Chesterfield.
Boro officials are still smarting from Ross Turnbull's departure to Chelsea as a free agent in July 2009. The Academy product turned down a succession of contract offers, and with talks with Steele initially stalling, there had been fears that history might have been about to repeat itself.
Thankfully, that will not now happen, and while Boro are still embroiled in a relegation battle at the foot of the Championship despite Saturday's win over Cardiff, the England Under-21 international is confident there are better times ahead.
I'm delighted to have signed so I can now concentrate on helping us get out of the situation we find ourselves in and then push on for bigger and better things, said Steele, who spent the second half of last season on loan at Northampton Town.
I told the manager this is where I want to be and where I want to play football. That was all he wanted to hear and it was all sorted very quickly.
Obviously, it's not nice when we're losing games, but it's still an honour to play for Middlesbrough and I want that to continue.
Playing in the first team is what I aspired to when I first came into the club at 12 years old. I've achieved that dream of playing for the first team, and hopefully I can continue that dream and help the club to push on.
Steele has made 22 senior appearances already this season, and the strength of his performances increased the urgency of this month's contract talks.
The youngster was always keen to extend his stay at the Riverside, but his decision to commit so quickly was undoubtedly influenced by the return of goalkeeping coach Stephen Pears.
Pears was Boro's goalkeeping specialist prior to Gordon Strachan's arrival, but was released to allow the former boss to appoint his long-term associate Jim Blyth.
One of Mowbray's first moves was to reinstate the former Middlesbrough favourite, and Steele has repeatedly expressed his pleasure at renewing his relationship with his mentor.
Mowbray must also take a great deal of personal credit for yesterday's news, as he made a new contract for the youngster one of his leading priorities after replacing Strachan in October.
I inherited Jason as number one goalkeeper and he has never given me any reason to reconsider that position,
said the Boro boss.
He makes impressive saves, he has a great work ethic to his training and he has a wonderful temperament.
I hope he can be a success as Boro's goalkeeper for some years to come.
Meanwhile, Boro have welcomed a former face back to Rockliffe Park after allowing Andrew Davies to join in a number of training sessions ahead of the January transfer window.
Stockton-born Davies, who made 65 appearances for Boro before making a £1m move to Southampton in 2007, has fallen out of favour with his current club, Stoke City.
He had an unsuccessful loan spell at League One side Walsall in October and has been given permission to find new employers by Potters boss Tony Pulis.
Middlesbrough's Under- 17s team are currently taking part in an international tournament in Qatar.
The side, which is managed by former Boro full-back Curtis Fleming, are scheduled to play two matches at the Aspire Centre in Doha.
They competed in the same competition last year, and are due to return to England on Thursday.
Today's reserve game with Sunderland has been switched from Billingham Synthonia to the Riverside Stadium because of weather conditions (ko 2pm).