Barnett enjoyed a productive season with Rovers last year, making 33 appearances and scoring three goals.
"I really enjoyed my first year at Tranmere so I'm pleased to have signed a new contract," the 20-year-old told the club's official website.
"With the new manager and the signings he has already made hopefully we can do even better than last season."
Boss John Barnes added: "Charlie is a talented young midfielder and I've been pleased with his work in pre-season so I'm delighted he will be in my squad."
