The 19-year-old made his debut for Brendan Rodgers' side in the Europa League tie against Young Boys in Switzerland.
Injury to left-back Jose Enrique meant Glen Johnson switched to the opposite flank allowing Wisdom an extended run in the side and he has made 14 appearances this campaign.
"It was an easy decision to make - as soon as they offered it to me, I grabbed the opportunity with both hands because it's a great club and I just want to continue to play for Liverpool," Wisdom said.
"I am happy with the progress I've made so far and hopefully I can progress more in the second half of the season and continue to keep playing.
"There's still so much hard work ahead. There is big competition within the team and everyone wants to play football.
"I just hope I can keep progressing and continue in the way I have been."
Wisdom joins fellow former reserves team-mates Raheem Sterling and Suso in extending his stay at the club, with more senior players Luis Suarez, Martin Skrtel, Daniel Agger, Brad Jones and Jonjo Shelvey all agreeing new deals since the summer.
Managing director Ian Ayre said Wisdom's new contract was indicative of the direction the club was moving.
"It's another great example of a player committing to the club and what we're trying to achieve under Brendan," he told liverpoolfc.com.
"He's a great young player, shown a fantastic improvement, broken into the first team and made a huge contribution and, rightly so, we've provided him with a new contract and a long-term one.
"Getting talent like him, Raheem and others to commit at this point is absolutely essential to the future.
"The manager, the owners and everyone have said the key is to build something for the long term and young players are a catalyst to that. None more so than Andre.
"He's come on leaps and bounds in the last year or so and that's because of all the hard work he's put in and the manager giving him a chance, so it's absolutely essential players like that commit themselves to the club."
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