Musonda made 16 appearances for Betis last season following a loan move in January and the Belgium under-21 international will return to the Spanish club for the whole of next season.
The 19-year-old joined Chelsea from Anderlecht in June 2012, along with his elder brothers Tik and Lamisha.
He has since gone on to win the FA Youth Cup with the Blues and last year signed a contract extension until 2019, but has not yet featured for the first team.
A statement on Chelsea’s official website said: “Charly Musonda will continue his development in La Liga with his loan to Real Betis extended to cover the 2016/17 season.”
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