The 20-year-old put pen to paper on an improved deal, keeping him with the Latics until 2015.
Nicholls is currently on loan at League Two Northampton Town and Wigan manager Roberto Martinez is pleased he has agreed to extend his contract by a further year.
He said: "Seeing Lee's progress from a younger age has been a joy and to have him stay here and continue his hard work is great news.
"Lee is a great goalkeeper and he has shown that at Northampton this season.
"He has had some outstanding performances and we are really looking forward to continuing to work with him."