The 23-year-old Finland international striker, who has been on loan at Blues since the beginning of the current campaign, will remain on loan for all of the 2004-05 season.
Forssell has so far scored 19 league and cup goals since moving to St. Andrews on loan last August and news of this signature will be greeted by all Blues fans I'm sure.
Talking about the loan extension, Forssell has been quoted as saying that while he is proud to be a Chelsea player, working with Blues boss Steve Bruce and playing on a regular basis will help in his development even further.
The Blues boss himself, while delighted to have the striker at the club for another season, has applauded the manner in which Chelsea Football Club have dealt with the transfer situation.