Adams' fresh terms includes a one-year option in the club's favour.
The Londoner, whose previous contract was set to expire this summer, joined Blues as a scholar in the summer of 2011 after leaving the West Ham Academy.
He was given a squad number in January 2014 and later that same month made his first team debut as a late substitute in Blues' 3-0 FA Cup third round victory over Bristol Rovers at St. Andrew's. To date, that has been his only senior Blues appearance.
However, Adams made an eye-catching impact during a loan spell at Vanarama Conference side Lincoln City in the season just gone, scoring twice with long-range thunderbolts, one of which has been shortlisted for the Goal of the Season in the Non-League Paper's annual National Game Awards.
It was the second time that the midfielder had spent time on loan with the Imps, following a spell at Sincil Bank in the 2013/14 campaign.
Adams, who clocked up a total of 29 appearances for Lincoln, also made 16 appearances for Blues U21s last term, scoring twice.