The 19-year-old marked his senior debut with a goal in the Europa League clash with Young Boys in September, and he has since made a further 13 appearances for Brendan Rodgers' side.
Speaking to the club's official website, Wisdom said: "It's a great honour to sign a new contract at the club and I'm very happy.
"It was an easy decision to make - as soon as they offered it to me, I grabbed the opportunity with both hands because it's a great club and I just want to continue to play for Liverpool.
"I am happy with the progress I've made so far and hopefully I can progress more in the second half of the season and continue to keep playing.
"There's still so much hard work ahead. There is big competition within the team and everyone wants to play football. I just hope I can keep progressing and continue in the way I have been."
The England youth team international arrived at Anfield in 2008 after four years at Bradford City, and Reds' managing director Ian Ayre says young players, like Wisdom, are the foundation of Rodgers' side.
"It's fantastic news. It's another great example of a player committing to the club and what we're trying to achieve under Brendan," Ayre said.
"He's a great young player, shown a fantastic improvement, broken into the first team and made a huge contribution - and rightly so, we've provided him with a new contract and a long term one.
"Getting talent like him, Raheem and others to commit at this point is absolutely essential to the future.
"The manager, the owners and everyone have said the key is to build something for the long term - and young players are a catalyst to that. None more so than Andre.
"He's come on leaps and bounds in the last year or so and that's because of all the hard work he's put in and the manager giving him a chance, so it's absolutely essential players like that commit themselves to the club."