Ter Stegen was four when he joined the Bundesliga team's youth ranks and took over as first choice late last season, helping them stave off relegation.
"Marc-Andre is an outstanding talent. He has got a long career in front of him and we can be proud to have helped to form such a player," said sports director Max Eberl in a statement.
Moenchengladbach, who host Werder Bremen on Saturday, are fourth in the table.
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