The 18-year-old defender broke into Peter Beardsley's under-23 side last term as well as captaining Dave Watson's under-18s to the quarter-finals of the FA Youth Cup.
And, along with fellow scholars Yannick Aziakonou, Owen Gallacher, Nathan Harker, Mackenzie Heaney, Ben Kitchen, Oliver Long, Lewis McNall, Callum Smith, Craig Spooner, he was rewarded with a new contract this summer.
The club has also offered new professional deals to midfielders Sean Longstaff, Dan Ward and Jack Hunter, goalkeeper Paul Woolston, defender Michael Newberry and forwards Tom Heardman and Luke Charman.
United were narrowly beaten by West Ham in the final of the Premier League 2 division two play-offs in May, but Bailey has already set his sights on the campaign ahead.
He told nufc.co.uk: "I can't wait. I'm just hoping to hit the ground running and try to be in the starting team next year.
"Obviously that'll be difficult because there's so many good players, but I'll do my best to get into the team."
Bailey - who has been with Newcastle since the age of seven - started last season playing alongside England youth international Lewis Gibson for the under-18s, and ended it by partnering Stuart Findlay at second-string level.
And Bailey said: "With 'Gippa' and Stu, they're both left-footed so we all complement each other.
"With Gippa, we both like to head the ball, we both like the same things, to bring it out from the back, and it's exactly the same with Stu so I've been really fortunate to have two great centre-half partners."
Bailey will hope to catch the eye in pre-season - United have already confirmed that they will take part in the Whitby Town Challenge Cup next month - then aim to cement his place in Beardsley's team.
And, while the last campaign ended in disappointment, Bailey is hoping to build on an encouraging third-place finish.
"We'll try to have a similar season to last year, but obviously get a better result in the end," he said.
"There were loads of positives to take from last season so hopefully we'll hit the ground running next year and we'll be in a similar position at the end."
