The full-back has put pen to paper on a new five-year contract which ties him to the Light Blues until the summer of 2017.
In doing so, he has become the fourth Gers player to pledge their future to the Ibrox outfit this week.
Youngsters Barrie McKay, Lewis Macleod and Robbie Crawford also committed themselves to Ally McCoist's side on Tuesday.
Wallace has become a big favourite with fans after being one of the first senior players to say he would stay with the 54-time Scottish champions in the close season.
And his performances this term have been good as he has made six appearances, scoring once against East Fife in the League Cup.
Wallace would also have been in the recent Scotland squad for the World Cup qualifiers against Serbia and Macedonia had he not been injured.
We'll have exclusive reaction from the 25-year-old this afternoon on the official club website and on RangersTV.tv flagship show Blues News tonight.