The right-back has penned a two-year agreement.
Hutton, 20, has been an impressive performer for Blues Under-23s.
After breaking a bone in his foot in the last pre-season friendly in July, he cut a frustrated figure due to an extended spell on the sidelines.
But he returned to action for the Development Squad in February and soon got into his groove.
He helped the Under-23s to runners-up in the PDL North and the National Play-Off Final.
Blues lost that showdown on penalties to Leeds United Under-23s at Elland Road and Hutton came close to netting what would have been the winner with a curving shot in extra-time that hit the crossbar.
Hutton was part of the Walsall Academy system but had to make his way into the professional ranks via Hednesford Town after failing to secure a scholarship with the Saddlers.
An athletic defender who can play at centre-half or wide midfield, Hutton joined Blues from the Pitmen in 2017 after a successful trial period.
Garry Monk took him away with the First Team squad on the last pre-season tour, to Austria and Germany.