Forshaw made his Premier League debut against Wolves last season.
"Getting on at Molineux was a great feeling," he told evertonfc.com. "It is what you work every day for. I was a bit nervous but once I got out there and had my first touch I really enjoyed it.
"We had a lot of injuries around that time so I had an idea I might be on the bench, but to actually get on was fantastic. Also, later in the season when all the players were back it was pleasing to stay on the bench for games like Chelsea at home."
The 19-year-old admits there were plenty of times last season where he felt less than confident of earning a new contract. Injury meant a slow start and Forshaw says he knew he had work to do.
"Things were uncertain," he said. "I had an injury and things did not start so well for me. Towards the end of the season I played more games and scored some goals but I still wasn't quite sure which way it would go and I am obviously over the moon to be signing.
"I have been here since I was eight and every year has been better and better. The Club is everything and is all I have known since that age.
"At the start of last season I wasn't getting a regular game for the reserves. I knew within myself that I wasn't doing well enough and made an effort to change that.
"Thankfully the second half of the season was brilliant with me playing all the time for the reserves and making a few first team squads. That was fantastic for my confidence and it gives you the belief you can keep getting better.
"I am really made up to sign - to get that bit of security again - and it is another chance for me to show what I can do."