Pereira, 22, joined the club in November last year and was initially with the development squad, but following a string of standout performances, he was moved into the first-team mix.
The tricky forward was amongst the substitutes five times for Nathan Jones’ side and during the last match of the season against Queens Park Rangers, came on to make his debut.
He also impressed with a cameo role off the bench versus Stevenage in the Carabao Cup earlier this month, and the manager said: “Dion’s done really well since he came in. He did well with the development squad and towards the end of last season, did enough to warrant the fact that he would be with the first team.
“The more he trains with us, the better he gets, so we’ve been delighted with him in pre-season. What he needs now is real testing, so we are hoping that we can get him that game time this season so he can further his development.
“He’s earned his contract, he’s done fantastically well. He’s a real technical player for us and we’ve got good hopes for him.”
After penning his new deal before training at the stadium today, Dion said: “I’ve really enjoyed my time at Luton so far and my debut against QPR was the cherry on top for last season, it was a really good opportunity for me to show the fans what I can do in the short time I played.
“Stevenage was also another good opportunity to show what I can do and I had a good run around. It was a shame about the penalty, but it is a good start towards the long season ahead.
“Having a full pre-season is such a big thing. I was waiting to have a fresh start, getting my fitness up and getting my confidence up with the team. The team are so welcoming and now it is just about cracking on with the season.”
Pereira enjoys being part of the group at Kenilworth Road, adding: “A lot of them I knew from previous clubs and playing against each other, but some I hadn’t met before I came here, like Sonny and Pelly.
“They are magnificent people to have around the changing room and on the pitch to help you and point you in the right direction, sharing their experience. I’m just looking forward to carrying on learning from them, from the manager and coaches, and working hard to improve.”
