The teenage midfielder had made his Championship breakthrough this season under Johannes Hoff Thorup before suffering a knee injury at Cardiff.
Forsyth is expected to return early in the new year but has pledged his Carrow Road future to 2028, with a further one year option.
The 18-year-old had only signed a fresh professional deal in August, but the new contract reflects his first team emergence.
“We are delighted to further extend Gabe’s contract – just reward for the fantastic progress he has made in recent months,” he said.
“He’s a very talented player, and he has taken so many great steps since the beginning of pre-season. He represents so much of what we are trying to do here, and we are enjoying working with him and seeing him progress into the senior game.
Thorup fast-tracked the youngster into his pre-season plans before a full Championship home debut in the opening league game of the Carrow Road season against Blackburn in August.
Thorup insisted the youngster has earned his spot after catching his eye in pre-season.
“He is a player for now but especially for the future,” he said. “He, of course, also needs experience in this league, and it will take time for him, but we have to walk the talk, and we talk about bringing young players into the game and into the strategy of the club. So it’s important we also do that when the chance is there.“
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