Bell-Baggie joined Rovers following a successful trial period in the summer and he will remain with the club until June 2015.
The 20-year-old former Rotherham player follows team-mates Max Power, Cole Stockton, Jake Kirby and Danny Holmes in committing his future to Tranmere.
"Abs has done very well for us this season," manager Ronnie Moore told Rovers' official website.
"He's an exciting player and one who is capable of winning matches for us.
"When he's on top of his game he's a nightmare for defenders and he's given quite a few full-backs headaches this season.
"He's got a great attitude and has fitted in well with the rest of the squad and I'm delighted he'll be here for the next two seasons."
- Sports & Recreation
- Danny Holmes