The German-born coach will remain with the Stars and Stripes until 2018 and also picks up a new role as technical director of U.S. Soccer.
Klinsmann has coached the U.S. for more than two years, compiling an overall record of 27-10-7. In 2013, he led the U.S. to one of the most successful years in team history, highlighted by the first place finish in CONCACAF qualifying for the 2014 World Cup.
"One of the reasons we hired Jurgen as our head coach was to advance the program forward and we've seen the initial stages of that happening on the field and also off the field in various areas," said U.S. Soccer president Sunil Gulati. "In the past two years he has built a strong foundation from the senior team down to the youth teams and we want to continue to build upon that success."
As part of the new deal, Klinsmann also becomes the technical director for U.S. Soccer.
Klinsmann has already been active in building an integrated philosophy throughout the U.S. youth teams, working closely with the coaches to develop performance driven standards both on and off the field, according to a U.S. Soccer release.
"The role of technical director is a huge challenge and also a huge opportunity as we look to keep connecting the dots to the youth national teams, coaching education, the development academy and the grassroots efforts in this country," Klinsmann said. "These are fascinating topics and I am excited to work with so many talented people and hear fresh ideas."
Last month, Gulati and Klinsmann announced three-time World Cup veteran Tab Ramos as the federation's youth technical director. Ramos will oversee the long-term strategies for development of both coaches and players at the youth level in the United States, working closely with Klinsmann and the youth national team and development academy coaches.
"It is vital that we stay focused on the development of our youth players and make sure the messages we are providing the senior team are being spread through our youth national teams as well the U.S. Soccer development academy," said Klinsmann. "With Tab as our youth technical director we will be able to continue to connect the dots and see more improvement."
Klinsmann, a former striker and coach for the German national team, became the United States' head coach on July 29, 2011, replacing Bob Bradley. After a rocky start - the U.S. lost four of its first six games under the manager - Klinsmann went on to record some historic victories.
Under Klinsmann, the U.S. has defeated world powers Italy and Germany and he led the Yanks to their first-ever victory against Mexico at Estadio Azteca. The U.S. qualified for the 2014 World Cup following a 2-0 victory over El Tri last September.
The United States has been drawn into Group G of the 2014 World Cup along with Ghana, Portugal and Germany. The U.S. opens its tournament on June 16 against Ghana.