The 19-year-old, who spent time on loan at Southport this season, has penned an undisclosed contract with the Saddlers.
Bakayoko made his debut against Port Vale in April 2014 and has made 14 substitute appearances for Dean Smith’s side.
“I’m happy to have signed this new contract,” said the club’s youth product. “I can’t wait for pre-season to start now so that I can get back down to work and show what I can do.
“It benefited me to go out on loan last season; to play regular, competitive first-team football certainly helped in my development and I only have to look at the progress that Kieron Morris has made to act as motivation.
“I want to be playing regularly and scoring goals. I know that it will require plenty of hard work and determination, but we have these qualities amongst the squad here and I know that my own development will continue in this environment.”