The 18-year-old Chelsea academy product spent last season on loan at Watford and has been spoken of highly by Blues boss Jose Mourinho, who plans to integrate the midfielder or defender into the first team in the 2014/15 season.
Chalobah said on the official club website: "It is great for me that Chelsea are willing to give me such a long contract, it is a big confidence boost.
"I know I must continue to improve to earn a place in the Chelsea team and with my future settled, I can concentrate on doing that."
Mourinho said: "He's a very, very good player and I like him very, very much. I am very impressed. For sure he is a Chelsea player."
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