The 51-year-old has been handed the extension along with three members of his coaching staff John Carver, Steve Stone and Andy Woodman.
Pardew guided the Magpies to a fifth-place finish in the Premier League last season, helping the Premier League club qualify for the UEFA Europa League.
Newcastle chairman Mike Ashley has decided to reward the former Charlton boss and his coaches for the team's performance last season and to bring long-term stability to the club.
Managing Director Derek Llambias hailed Pardew and is looking to emulate the success of Manchester United and Arsenal who have shown that keeping faith with the manager is a productive formula for building a winning team.
"If you look at clubs like Manchester United and Arsenal, Sir Alex Ferguson and Arsene Wenger have shown that stability gives you the best platform to achieve success, and that is the model we wish to emulate here," Llambias said in a statement.
"We're looking to build on the success we had last season and these new contracts are aimed at keeping the club progressing on and off the pitch, as we have done since returning to the Premier League in 2010."