The Under-23s captain is the latest member of the Development Squad to commit to the Club.
Bajrami is currently on the mend after a hernia operation, which was necessary after he was troubled by a niggle towards the back end of last season.
He should return to full pre-season training in a matter of weeks.
In his first season as a professional in 2018/19, the Birmingham-born defender was a mainstay of the Under-23s side which finished runners-up in the PDL North and reached the end-of-season Play-Off Final.
Bajrami, 19, joined the Blues youth ranks in 2014 after impressing in what was his third separate trial spell at the Club, having been turned down in 2011 and 2012.
His persistence paid off and the commanding centre-half became a Blues scholar in 2016, spearheading the charge to the FA Youth Cup Semi-Finals as skipper of the team in 2017/18, before signing his first pro contract the following summer.
Bajrami, whose parents moved to England from Albania just two weeks before he was born to flee the troubles in their homeland, has demonstrated his aerial strength in both penalty areas, chipping in with seven goals during his scholarship and another two for the Under-23s last term.
But he is equally as adept with the ball at his feet, his composure and confident manner at the heart of defence ensuring he was one of the first names on the team sheet for Development Squad matches last term – his 36 outings making him the highest appearance-maker below First Team level.
His performances for Blues Under-23s also brought him international recognition for the first time in March 2019, representing Albania in two European Under-21 Championship qualifiers.