The 22-year-old, who initially moved to Schalke on loan at the start of the season, has now had his future clarified with the Royal Blues awarding him a permanent stay in Gelsenkirchen.
Bentaleb has made 20 Bundesliga appearances for Schalke and scored four goals.
"It's great to have somebody who trusts you," the Algerian international said. "The coaching team, my teammates, the people in charge here and basically the whole club have made it easy for me to feel at home at Schalke and I'm delighted to be part of this club."
Watch: Bentaleb has slotted right in at Schalke!:
"Right from when I first came to Schalke in the summer, it was my objective to play as often as I could here and to convince the club to sign me permanently," Bentaleb told Schalke's official website.
"It feels amazing that this has now happened and everything is signed and sealed."