The flamboyant coach has opted to ink a new deal at the Bundesliga side that will keep him at the Volkswagen Arena until the summer of 2015 after impressing the club board
The 58-year-old's previous deal was due to expire in the summer of 2013, but he has now inked a two-year extension in order to guarantee continuity at the Bundesliga side.
"We are looking for continuity and are heading in the right direction with Felix Magath. We enjoyed our most successful time under him. The early contract renewal is a vote of confidence from our side," CEO Francisco Javier Garcia Sanz said on the official Wolfsburg website.
Magath rejoined Wolfsburg from Schalke in March 2011, and guided the Volkswagen Arena side to eighth spot in the Bundesliga this term.
He previously enjoyed a successful spell at the Wolfe from 2007 until 2009, when he steered them to the only German title in the club's history.