The 18-year-old, who has graduated through MK’s academy, has been rewarded for his impressive start to the season with a new deal that will run until June 2017.
Alli, who featured for his country in last week’s 1-1 draw in Germany, has featured in every one of the club’s first nine games this season, and found the net three times.
Speaking to MKDons.com, the midfielder said: “I’m delighted. This came as a bit of surprise but I’m thankful to the manager, the chairman and the club for this new deal and I hope to repay everyone on the pitch.
"I’m a Milton Keynes boy so I couldn’t be happier representing my local team"
Dele Alli
“My focus is solely on playing for the Dons. I’m a Milton Keynes boy so I couldn’t be happier representing my local team. I’m playing regularly in the first team as well which will only stand me in good stead for the future.
“I love this club and it would be a dream to help take them to the next level. Hopefully we can continue this strong start to the season, starting with Crewe on Saturday.”
MK Dons manager Karl Robinson added: “Dele is an exceptionally gifted player and it was only right that we rewarded him for a fantastic 12 months with this new deal.
“Dele will continue to be linked with some of the world’s biggest clubs and it’s inevitable that there will be a time when we will have to let him go, whether that be in January, next summer or whenever.
“However, for the time being, he remains an MK Dons player and we’ll continue to enjoy watching him progress week-in, week-out here at stadiummk. Dele remains fully focused on playing for this club and we remain just as committed to him and his development.”