Berahino - who came through West Brom's youth team - has made 10 appearances for the club this season, scoring six goals, and has committed until June 2017 after penning a three-and-a-half year deal on Monday.
The 20-year-old has come to prominence in the Premier League this season with a series of promising displays, including scoring the winner in a 2-1 victory over reigning champions Manchester United at Old Trafford in September.
He also notched a hat-trick in the club's 3-0 victory over Newport County in the League Cup in August.
Berahino's new deal will be a relief to head coach Steve Clarke, with the England Under-21 international reportedly drawing interest from title hopefuls Arsenal and Chelsea.
Speaking to the club's official website, West Brom sporting and technical director Richard Garlick said: "To be able to reward one of our proteges, who has worked his way up through the ranks from the age of 11, is a great moment for the club.
"It's a fantastic story for us and especially for our hard-working academy staff, who have played a fundamental role in his development over the years.
"Producing one or two players who can supplement the first team is something we want to achieve every year.
"We hope this is the start of that process as we feel we have a number of other young, exciting players coming through.
"It's difficult for any 20-year-old to get into a Premier League side and there are going to be times when Saido's maybe not playing as much as he would like to.
"He's not the finished article and he has to remain patient, as we do with him."
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