The 22-year-old, who has been linked with Wolves, Wigan, West Ham and Fulham since Boro's relegation from the Premier League, has committed himself to the club until 2012.
Bates, a member of the club's FA Youth Cup winning side in 2004, has endured an injury nightmare since breaking into the senior squad.
However, his form at the end of last season impressed Southgate, particularly when he was asked to plug a gap in the middle of midfield.