The Liga club has had an excellent season thus far and sits second ahead of local rival Real Madrid with just Barcelona higher up in the table. The club has also qualified for the Copa del Rey final thanks to a 4-3 aggregate win over Sevilla in the semifinal, setting up a mouth-watering cup clash against Real Madrid in May.
"Atletico Madrid and Diego Simeone have agreed to renew the coach's contract for the next four seasons," a statement released on Tuesday afternoon by the club said. "The coach, who played as a player in the Rojiblancos in two separate periods [1994-97 and 2003-05] including the historic double-winning time in 1996, returned to Atleti in late December 2011 to take over the first team.
"Simeone won two European titles in his first year as Atletico coach - the Europa League and the UEFA Super Cup - and this season has qualified the team for the final of the Copa del Rey."
One of the few negatives for Simeone this season was the club's shock exit from the Europa League in February at the hands on Rubin Kazan in the round of 32.
The Rojiblancos were the reigning champions in the competition, although, based on their current trajectory, it will be the Champions League where they will be competing next campaign.
The Argentine cut his teeth on the coaching front at the likes of San Lorenzo and Catania before succeeding Gregorio Manzano in the Atleti hotseat, and has seen his reputation soar while at the Vicente Calderon. He had been mooted as a surprise replacement to Mourinho at the Santiago Bernabeu, and, more realistically, been suggested as an alternative to Andrea Stramaccioni at Inter or Rafael Benitez at Chelsea.