The 22-year-old scored 13 goals for Bradford during his first season following his move from non-league Guiseley for an undisclosed fee.
Peter Taylor told the Telegraph & Argus: "James has got to look at this at the first step on the ladder."
"I'm pleased as long as he carries on doing what he has been for us," added Taylor.
"It's good for the football club and it's good for him. He's got to keep it going now.
"But looking at it and talking to him for three months, I can see he's got the right attitude to go on and be a good player."
Bradford joint-chairman Mark Lawn added: "It's nice to see in this day and age somebody who's got a bit of affection for their local club and is willing to sign a long-term contract."
Source: BBC Sport
Source: BBC Sport