The 20-year-old member of England's U21 national team still has some developing to do before he becomes a major piece of the puzzle for new manager Brendan Rodgers, but locking up young talent is always a wise move before the prize tag skyrockets.
Shelvey had his first signature moment as a member of Liverpool late last season against Chelsea, scoring his first Premier League goal from 30 yards out. It was a terrific effort from a player without much experience in the EPL.
He had no problem showcasing his ability in the Championship, scoring six goals and adding two assists in just 10 games while on loan with Blackpool last season. It's a sign that he's close to making his presence felt for the Reds.
Although he hasn't generated nearly as much hype as some of the league's other rising stars, it's hard not to be impressed with the potential he possesses. He clearly has a high football IQ and a nose for goal, putting him on the road to success.
Shelvey is also a good fit for the system Rodgers will spend the next few seasons implementing at Anfield. It relies on quick passing and a steady build up to create chances, the same plan of attack that allowed the new boss to have success with Swansea City.
For a player like Shelvey, who is waiting for his big break, playing in the right system is often the most important thing because it allows his best attributes to shine through. The new contract shows how much confidence the team has that he will excel.
While the deal isn't one that will excite the fanbase like a high-profile transfer, it's smaller moves like this that help build the foundation of a team. Rodgers has already put a focus on that, which should pay off in the long run.
It will be interesting to see how much playing time Shelvey receives next season after his strong finish to the last campaign. Either way, it's only a matter of time before the Reds are using him as a full-time starter.
That's why it was smart to lock him up now so the team can sit back and watch him flourish.