The 18-year-old born-and-bred Brummies have both formally signed a one-year contract, with a further one-year option, having been offered terms last month
The duo are highly-rated Blues Academy products and will now push to follow the lead of the homegrown stars who became first-team regulars for Lee Clark during the 2012/13 campaign.
Looking ahead shortly after the ink had dried on his first pro deal, Hales told bcfc.com: "A lot of hard work and sacrifices have helped me to get this professional contract but I know I've certainly not made it. A lot of people have reminded me that this is where the hard work starts so I've just got to keep pushing in the same way I did when I was a scholar to make the best out of my career."
Centre-half Fry, who was raised in Hall Green, was handed a first-team squad number this season and has put in some impressive performances for Richard Beale's Blues U21s in the U21 Professional Development League Two North.
The defender, who has been on Blues' books since the age of nine, continued: "The set up at the club has been brilliant and I wouldn't have changed a thing. The club have helped me a lot and hopefully I can repay them by playing for the first-team. This is a good club to be at as a young player and hopefully I can take the opportunity with both hands."
To watch an exclusive BluesTV interview with Fry click here