Gardner jnr, who is currently recovering from a cruciate ligament injury, has committed himself to Villa until the summer of 2014.
The 18-year-old is regarded as the latest in a line of promising young talent at Villa.
The England Under-20 international, who is close to returning to action, wants to emulate the likes of Marc Albrighton, Ciaran Clark and Barry Bannan by forcing his way into the senior side.
Gardner said: "I set my heart on playing for Villa a long time ago and words can't describe how I feel. It's unbelievable. The likes of Marc Albrighton, Ciaran Clark, Barry Bannan, Eric Lichaj and Chris Herd have all played in the first team this season.
"I remember my brother, Craig, Gary Cahill, Peter Whittingham and Gabby Agbonlahor all breaking through from the Villa academy. This makes you realise what's possible to achieve and I want to push on and work even harder to try to follow some of those lads.
"I've been at Villa since I was six years old and my focus is on continuing to improve and continuing to progress."
Gardner captained Villa's youth team during the early part of the 2009-10 campaign and scored 14 goals before injury prematurely ended his season. The Solihull-born youngster has also played for England at Under-17 and Under-19 levels.
Villa boss Gerard Houllier said: "Gary is a young player with potential and a desire to succeed and the contract he has just signed is a sign that we trust him to be a player for the future.
"We're delighted that Gary has joined players such as Marc Albrighton, Barry Bannan and Ciaran Clark who have all signed new deals recently and we are encouraged by their progression."
Source: PA
Source: PA