The 18-year-old full back has penned a new two-and-a-half year deal to keep him at the club until the summer of 2019, with the option for a further year too.
Justin, who only agreed his first professional contract just over a year ago, has excelled this term, making 14 appearances so far, including as left winger in last Saturday’s 2-0 win at Blackpool.
Speaking to the club’s official website, boss Nathan Jones said: “It’s a reward for how well James has progressed. We had high hopes for him, hence the length of contract the club gave him before.
“But since pre-season when he came into the first team, he’s established himself one, within the group, and two, within the actual first 11.
“We are very excited by James. He’s a young player who’s come through the ranks and that’s what we are trying to promote here.
“We have always said there is a pathway for them and it’s where talent and opportunity meet.
“We see him as predominantly a right-sided defender, but we were forced into a change in the Villa game and he proved he can do that job on the left too. It’s great to have that versatility because he gives us options on both sides. Now he has to continue the development he has shown.”
Justin, who joined the Hatters as a seven-year-old, added: “I’ve only this year broken into the first team properly, so to have played so many games by this stage has been special.
“The gaffer pulled me after training one day and said ‘We are going to offer you a new deal’, and I was over the moon. There’s not much more I could want really.
“I’m loving every minute of it, because when you go out there in front of the fans, there’s nothing quite like it. Having been here so long and supported the club since I was really young, it means so much.
“Now I just want to concentrate on continuing my development, listening and learning from the coaches and the players around me.
“The experience players like Johnny Mullins, Scott Cuthbert and Alan Sheehan have between them at the back is crazy.
“They help me through games and give me advice and tips – things I can improve on as well, not just ‘Congrats, well done’.
“Sometimes they have to be stern with the younger lads and that’s what they do. I’m learning loads from them.”