The 20-year-old enjoyed a breakout season at the Bulldogs in 2013, earning a NAB AFL Rising Star nomination in round 15 against Greater Western Sydney.
Western Bulldogs list manager Jason McCartney confirmed the new deal to AFL.com.au, admitting Talia's signature was a priority.
"Michael's was tidied up in the back end of the season, which was a great result because obviously key defenders are hard to find and he's progressing quite nicely.
"We did a little bit of work [on the contract] earlier in the year and then obviously when it hit the mid-point of the year it was tidying it up and it was done in the back end of the year."
Talia has played 13 games since his debut in 2012, forging a promising partnership with Jordan Roughead in the team's defence.
"It's important to get the pillars of your defence right," McCartney said.
"Obviously we had Lakey moved on the year before. The great thing for both Jordan and also Michael is you've got Dale Morris there, and that's been critical in the early stages of these guys' development."
Talia's brother, Adelaide's Daniel, is a Rising Star winner, and the Bulldogs can see similarities emerging between the pair.
"Obviously Michael's got fantastic running ability, which Daniel has as well," McCartney said.
"Michael probably tends to win a little bit more of the football than Daniel, yet Daniel can lock down on players a little bit better than Michael can at the moment. It's funny, there's a lot of similarities, and there's a lot of differences."
Talia is the grandson of Harvey Stevens, who is a premiership player at the Bulldogs, and the romance of his story isn't lost on the club.
"It's not very often that you actually get to play for the club you grew up barracking for, let alone the club that your grandfather is a premiership player for, and let alone it's the Bulldogs who've only unfortunately won one premiership," McCartney said.
"It is terrific. I've heard his grandfather speak, and he's a very proud man, that's for sure."
