The 20-year-old put pen-to-paper on a one-year contract extension yesterday. His previous deal at Hillsborough was due to run out at the end of this season.
Penney, a lifelong Wednesday fan, has committed his future to the Hillsborough club, signing a new deal which will keep him at the Championship club until 2020.
The Owls opened contract discussions with Penney during the most recent international break.
The 20-year-old, a graduate of Wednesday's youth system, has produced a string of impressive performances since making his Owls debut as a substitute in their Carabao Cup triumph at Sunderland. He was crowned the Wednesday player of the month for September.
Penney has established himself as a valuable member of Jos Luhukay's squad, making nine starts and four sub appearances. His pace, energy and versatility have caught the eye, with Penney having been deployed at left-back, the left wing and as part of a three-man attack.
"It has been a great experience for me (playing first-team football),' said Penney, who has previously been loaned out to Mansfield Town and Bradford City.
'It was the next step I needed in my career and thankfully the gaffer has given me a chance. He has put his faith in me and hopefully I'm repaying him now."
Penney has started on the bench in the last two outings and will be hoping for a recall when Luhukay's team entertain Norwich City this weekend.
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