The 23-year-old excelled at the Reebok Stadium last season following his switch from Aston Villa, and earned a call-up to Fabio Capello's England squad in June as a result.
"Gary is the best young centre-half in the country by an absolute mile," said Bolton boss Gary Megson.
"He's had another great season and I believe it's only a matter of time before he plays for England on a regular basis.
"Not only is he an outstanding footballer, he is a great lad to have around the place and I'm delighted that he sees his future lies with Bolton Wanderers."
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