Worrall, 20, who made his debut in October and has since played 10 times, is now contracted until June 2020.
The locally-born central defender told BBC Radio Nottingham: "It has been a long time coming but to get it over the line is a very proud day for me.
"Signing a new contract is very good and I am very happy to sign with Nottingham Forest."
The Reds have also extended the contract of midfielder Ryan Yates until 2019.
The 19-year-old has yet to play for the first team, but is currently on loan at Shrewsbury after a spell with Barrow earlier in the season.
Nottingham Forest defender Joe Worrall has signed a new three-and-a-half-year deal with the Championship club.