The teenage midfielder, who turns 18 today, has already made two first-team appearances for the Saddlers, both coming in this season's Checkatrade Trophy, first against Middlesbrough U21s and then versus Port Vale.
Bates, who is highly thought of at the club and has even drawn interest from several Premier League sides, spoke to club journalists and expressed his delight at realising his dreams of becoming a professional footballer, immediately setting his sights on having an impact at first-team level next term.
Speaking via the club's official website, Alfie said; "It’s good to get the deal done, especially on my 18th birthday. It’s a good moment for myself, for my family and for everyone who has helped me along the way.
"My aspirations for next season are to play more games for the first team and show everybody what I can do. Hopefully I can score some goals as well if I get the chance. The senior players here have really helped me develop my game this season, especially Adam Chambers.
"He is a really good role model and he has helped me out a lot in training, on and off the pitch. If I have done something wrong, he is always there to help me out, telling me to maybe play forward next time or lay it back or keep the ball.
"He’s been a good role model, as have a number of the other lads. I really enjoy it here. I’ve been in and around the first-team group most of the season and have played regularly for the youth team, so it’s been a good season for me personally.
"I’m looking forward to the future but I’ll enjoy today; it’s a great way to spend your birthday!"