The 22-year-old has committed his future to the club until the summer of 2019.
Mugabi spent five years in Southampton’s prestigious Academy and won the Under-21 Premier League Cup with the Saints before joining Yeovil last August.
He made his debut in the Glovers’ EFL Cup triumph over Sky Bet League One outfit Walsall and not long after marked the likes of Romelu Lukaku and Yannick Bolasie in the second round against top flight side Everton at Goodison Park in front of 25,000 people.
The versatile youngster, who can operate at centre-back, left or right-back, made 39 appearances in his first season of professional football, netting on two occasions.
Boss Darren Way said: “Bevis made a huge sacrifice in joining Yeovil Town from Southampton last season, but the experiences he’s gained at YTFC has been a huge part of the progress in his footballing career.
“He’s strong and athletic and has huge potential to make a success of his career.
“I’m very excited for him to play another huge contribution to the team next year.”