The 18-year-old full-back put pen-to-paper on a new long-term deal, which will keep him at Ewood Park until June 2017, with the option of a further year.
Adam said: "It is fantastic, it is something I've been working towards for a long time now and it feels great to get it done.
"I really enjoy it here, I always have, I've been here since I was nine or ten and I've enjoyed every minute of it.
"It feels great to secure my time here."
A product of the Rovers Academy, Adam rose quickly through the ranks before making his first team bow as a second-half substitute away to Wigan Athletic last November, aged just 17.
His full Premier League debut came just a month later in Rovers' Boxing Day draw away to Liverpool.
The same week, Adam signed his first professional contract with the club, before playing a key role in Rovers' famous 3-2 victory over Manchester United at Old Trafford on New Year's Eve.
A Welsh Under-21 international, who is on the fringes of the senior squad, Adam hadn't featured for Rovers this season prior to the arrival of new manager Henning Berg, who has started the talented teenager in his first seven games in charge.
The Rovers boss said: "We are very happy that Adam has agreed to extend his contract.
"He is a talented young player, with good potential, who has done really well since he came back into the team.
"He has shown in the games that he is capable of doing well for us and we believe that this is the right place for him to develop further."