The exciting attacker has penned a new two-year contract.
Bailey, who can operate as an attacking midfielder or striker, has been at the Club since the age of eight, and received international recognition with England at Under-16s level back in 2014.
Bailey, whose preferred position is in the number 10 role, was part of the Blues Under-18s side that reached the FA Youth Cup Semi-Finals in 2017/18.
It was around the same time that he also got a flavour of First Team football as an unused sub in the Championship fixture against Ipswich Town in March 2018.
Bailey, whose father Luke was on the books at West Brom as a schoolboy, signed his first professional deal last summer and was involved in two of Blues’ senior pre-season fixtures ahead of the 2018/19 campaign.
After initially struggling with the greater demands of Development Squad football, the Birmingham-born youngster became more and more of a pivotal player for the Under-23s in their burgeoning PDL North title challenge last season.
The 19-year-old undoubtedly benefited from a loan spell at non-league Gloucester City during the turn of the year, scoring twice in eight appearances in the National League South – the sixth tier of English football.
With his eyes opened by the rigours of the men’s game at grassroots level, Bailey returned a more rounded and mature player and his seven goals in 20 outings for the Under-23s helped the team reach the PDL Play-Offs, where Blues were unfortunate to lose on penalties to Leeds United in the Final.