The 20-year-old is currently on a season long loan with League Two Walsall, where he has kept eight clean sheets in 28 games in all competitions.
Technical director Dan Ashworth said, "Carl has continued to impress us with his development since joining the club in 2019 and he fully deserves this new contract.
"He has trusted the pathway we have put him on, starting with a really positive loan with Worthing, followed by a year with the under-23s and is now testing and proving himself in League Two with Walsall.
"This season was about Carl showing what he has learned so far and building on that. We’re pleased to see that he is flourishing."
Albion's first-team goalkeeping coach Ben Roberts added, "Carl has been a breath of fresh air since joining the club from Halifax Town, and relished every challenge that has come his way.
"He is a consummate professional on and off the field, with a real dedication to his craft. He epitomises what we look for from the modern, in-possession goalkeeper, and look forward to supporting his development in the years to come."
The keeper came through the ranks with Huddersfield Town, before joining Halifax Town in 2017.
He signed for Albion in January 2019 and spent the 2019/20 season on loan in the Isthmian League Premier Division with Worthing.
A campaign with Albion under-23s followed, and he capped that by winning the club's Men's Young Player of the Year Award.
He signed for the Saddlers at the beginning of this season, and his form with Matt Taylor’s men was rewarded with a call-up to the England under-21s squad in October.
Walton to Ipswich
Walton, who is out of contract at Brighton this summer, joined The Blues on a season-long loan last August, with an option for recall.
There is understood to be interest elsewhere in Walton who has performed well for Ipswich.
It is believed Ipswich are in contact with Brighton regarding a permanent deal at a time when Albion are said to be willing to sell and not let his contract run down to the summer.