The Norfolk-born 18-year-old helped the Under-18s reach the quarter-finals of the FA Youth Cup last season and clinch the runners-up place in their league.
His only taste of first-team experience came when he was named on the bench for the final game of the 2007/08 season against Sheffield Wednesday.
But with David Marshall having left for Cardiff this summer and the future of Stuart Nelson still to be resolved, Rudd is going to be firmly in the first-team picture when City begin life in League One.
Rudd told the club's official website: "I'm very proud and happy. I've got a new contract for the beginning of the season so I can kick on and hopefully get a place in the first team."