The highly-rated 18-year-old, who has been linked with a move to Manchester United, has committed himself to the Ligue 1 outfit until 2017.
Chelsea are also reported to hold an interest in the talented teenager, who is already being talked about as a future leader of the France national side.
Zouma is flattered by the high praise and mounting interest, but is aware of the need to keep working on his game.
For that reason, the teenage centre-half has opted to remain with a side prepared to offer him regular football and one at which he feels comfortable and able to produce his best.
In a statement released through St Etienne, Zouma said: "This extension is a great vote of confidence in me from the club.
"St Etienne means a lot to me because it is where I was developed.
"This is a new step in my career. I still need to learn. I will also gain experience and I know that will help me to grow."