The Italian manager who had joined the Foxes last season as their manager replacing Nigel Pearson, guided the club to ultimate glory. Leicester had beat all odds to lift the Premier League title.
Leicester City confirmed the news on Twitter as well as on their official website.
The official tweet read:
The official club statement read: "Leicester City Football Club is delighted to announce that its First Team Manager, Claudio Ranieri, has signed a new contract with the Premier League champions."
After renewing his contract with the club, Ranieri said: "From the moment I talked to the owners about their vision for Leicester City, I knew it was something I wanted to be part of for a long time.
"The energy that exists at this Club - from the owners and the staff, to the players and supporters - is something very special. I am very happy and proud that I will be part of it for years to come.
"Last season, that spirit and our hard work helped us to achieve something magical. If we can continue to work hard, maintain our passion and continue to fight with all our hearts, I am sure we can continue to be successful together."
Club Vice Chairman Aiyawatt Srivaddhanaprabha said: "Twelve months ago, we brought to Leicester City a man whose knowledge and experience, we felt, could lead us into the next phase of our long-term plan.
"What he would go on to help us achieve, in the time we have achieved it, has been beyond anything we could have anticipated.
"Claudio's qualities, both as a man and as a coach, have been very clear since the moment he arrived - qualities that have helped Leicester City to progress on every level.
"We have strong foundations from which to keep moving our Club forward and I'm delighted that Claudio will continue to be part of that journey."