The 20-year-old centre-half has penned a three-year deal, with the option of a fourth.
Last season was the player's first as a professional having been plucked from non-league Radcliffe Borough in 2009 and he played a major part in Dale's promotion to the third tier, grabbing 11 goals along the way.
Sporting and technical director Dan Ashworth said: "We're delighted to welcome Craig to the club.
"He is an excellent young prospect who we have thoroughly scouted.
"We tracked him for the whole of last season, watching him around 20 times in League Two, and he has started this season well in League One as well as impressing against Barclays Premier League and Championship opposition in the Carling Cup.
"As a club, we've often talked about having an underbelly of players who will be ready to challenge for a first-team place in a couple of years' time."