The 17-year-old Dion earned promotion to the club's U18 ranks at the tail end of last season and will now be part of the youth side for the hostilities of next campaign.
Described as a clever operator in the middle of the park, Dion is a creative player who can play across every position in midfield.
"It's a proud moment for me and my family,'' McGhee told United's official website.
"I'm really happy to get the contract signed. I've worked hard and listened to my coaches, listening to the advice and just enjoying what I do."
Brandon Williams, Ethan Galbraith and James Garner all signed their first professional contracts with the Red Devils recently.
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