The 42-year-old has signed a three-year contract with the Italian champions after enjoying a dream start to life in Turin
The 42-year-old was widely expected to sign a new contract after guiding the Bianconeri to the Scudetto in his first year in charge of the club.
And he has now added two more years to his previous deal, which would have expired in the summer of 2013.
Under his command, the Old Lady finished undefeated in Serie A, four points ahead of second-placed AC Milan.
However, he was unable to land a league and cup double after his side were beaten by Napoli in the final of the Coppa Italia.