The 21-year-old has impressed in this campaign on loan at League Two side Port Vale, scoring seven times in his first experience of senior football, leading to the new deal until June 2021.
After signing the new contract, Taylor has also extended his loan stay at Port Vale until the end of the 2019-20 season.
The central midfielder joined Nottingham Forest in 2015 having previously been in the academy at Manchester United, going on to be a consistent performer for the Under 18s and Under 23s before joining Vale on loan back in August 2019.
The club would like to wish Jake the best of luck for the remainder of the season.