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Burnley rejected an offer of £15million earlier in the transfer window.
The 21-year-old played 28 times for the Clarets as they were relegated from the Premier League last season.
Trafford missed the first Championship game of the season, but returned on Saturday for the clash with Sunderland.
Scott Parker’s side lost 1-0 at the Stadium of Light.
Trafford was also part of England’s Euro 2024 squad, before being cut from Gareth Southgate’s final 26-man squad.
Burnley boss Parker was asked about the goalkeeper’s future last week and said.
“At this moment in time, he’s here. What you need to understand is that speculation is speculation.
James is here and James has got the shirt, hence why he played.
He’s another one that had a tough season last year but he’s an exceptional keeper and he showed every bit of his quality on Monday night.”
Burnley have seen a number of players already head for the exit this summer with Wilson Odobert and Sander Berge heading to Tottenham and Fulham respectively.
Speaking about transfers, Parker said: “It’s been a tough week.
Some of the changes were forced with injuries, some due to the fact maybe certain players will be leaving who don’t see their futures here.”
“I think it will be a busy week – (the last) week has been extremely busy.
“These are some of the problems you face as a club that have just come down from the Premier League.
I think it will be another busy week and we will have to try to manage the best we can.
