The striker has withdrawn his transfer requestand agreed a new deal at Villa Park until 2017.
The 22-year-old's change of heart came after a "full and frank discussion" with manager Paul Lambert
He said on the club's official website: "I spoke with the manager when I returned to training and we had a good talk. I am very happy to be back here in Birmingham and at Aston Villa, and to sign a new contract.
"This is a great club and it has given me a lot. Now I have to give back to my team-mates and the fans who have always been right behind me.
"The end of last season was very good and the lads were very strong. It was not easy but we came through it and the confidence is high. So everyone knows what we have to do now - be better. I need to be better than last year."