Anderson, 20, grew up and played his junior footy in the local area before signing to play with the Knights Toyota Cup team in 2011.
His performances in his first year at the Club were rewarded with winning the NYC Player of the Year and NYC Players Player awards.
“We are delighted to have Sam commit to our club for the 2012 season,” CEO Matt Gidley said.
“This caps a wonderful year for Sam who collected both the Player of the Year and Players Player awards for our NYC team at our end of season presentation night.
“The fact that Sam is a local junior further reinforces our philosophy in ensuring our best young players remain in Newcastle and chase their dreams to represent our Club at NRL level.”
Anderson is looking forward to continuing his career at the Knights.