Staal, the 18-year-old centre who has been one of the surprise stars of the early NHL season, will stay with the Penguins only four-plus months since being the No. 2 draft pick.
When the season began, the Penguins were expected to return Staal to the Ontario Hockey League's Peterborough Petes after nine games. The move would have prevented the first year of Staal's three-year entry-level contract from kicking in.
However, Staal has played so well he moved up to the Penguins' No. 2 line last week after fellow rookie Evgeni Malkin shifted to the top line with Sidney Crosby. Staal has four goals and an assist in nine games and played more than 17 minutes in the Penguins' 8-2 victory at Philadelphia on Saturday.
In less than a month in the league, he already has become the youngest player in NHL history to score twice short-handed in a game and on a penalty shot. He also is the youngest player in nearly 63 years to score twice in a game.
"He earned it," coach Michel Therrien said Monday. "He earned it to be with us. Earlier in the year not too many people would think we would have made this decision. But he played really well. We're a young team but a mature team, and Jordan is playing a mature game for his age. ... He has a lot of skills and has a great work ethic.
"This is the best decision for Jordan, to stick with us."
The six-foot-four Staal's long reach and stickhandling have made him one of the most-used penalty killers on a team that is off to a 6-3 start. The Penguins began last season by losing their first nine games.
"Jordan has earned a spot on our roster," Penguins general manager Ray Shero said. "We all knew about his skill level when we drafted him, but his work ethic, maturity and consistent effort have enabled him to make what normally is a difficult transition for a teenager."
The Penguins are returning 19-year-old defenceman Kristopher Letang to Val d'Or of the Quebec Major Junior Hockey League. Letang had two goals in seven games before being scratched from the Penguins' last two games.
If the Penguins had sent Staal back to his junior team, he could not have rejoined them until Peterborough's season was over. He also could not have been sent to one of their minor league teams.
"Of course he wanted to stay in the NHL - everybody wants to play in the NHL," Crosby said. "He's playing well enough to be here."
Staal, the younger brother of Stanley Cup-winning forward Eric Staal of the Carolina Hurricanes, figured he had a good chance of staying. But he didn't want to get his hopes up, and he wasn't told until less than two hours before practice Monday.
"I'm not changing anything about my game," Staal said, meaning he wouldn't relax now that he's assured of playing out the rest of his so-far promising rookie season. "I want to keep playing like I was and hopefully keep contributing. You have to play consistent hockey to keep playing in this league."
By deciding to keep Staal, the Penguins face the prospect that both he and Malkin - who has five goals in his first five games - will become restricted free agents following the 2008-09 season. The Penguins can retain both by matching any offers to them.
Previously, the Penguins expected that Crosby (2008), Malkin (2009) and Staal (2010) would become restricted free agents in consecutive seasons, rather than having two do so in the same year.
When Staal, Letang and the 19-year-old Crosby scored goals against the Rangers on Oct. 12, it was the first time in 24 years three teenagers scored in the same game for an NHL team.