The former Crewe and Preston defender has been part of an ever-present back-four that has conceded just six goals in eight Barclays Premier League games.
"Since I came here last year Billy has been improving all the time," Clarke told the WBA website.
"He put in a lot of good performances last year and there was a good competition between him and Steven [Reid] for the right-back spot.
"This year Billy has just managed to get himself ahead of Steven with good performances.
"He is solid defensively and still gives us creativity going forward on occasions."
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