During the most recent campaign, McGhee made the breakthrough in the Under-18 ranks, making three starts and 10 substitute appearances in the age group.
McGhee has now been rewarded for his impact with a new deal, and the creative midfielder has admitted that he is proud to have been given the opportunity to extend his stay at Old Trafford.
The 17-year-old told MUTV: "It's a proud moment for me and my family. I'm really happy to get the contract signed. I've worked hard and listened to my coaches, listening to the advice and just enjoying what I do.
"My family and my coaches have helped me kick on and improved me as a person. [United have] the best facilities in the country. What a place and what a club Manchester United is."