The 49-year-old took the reigns in 2008 and guided le Tefece to a Europa League berth in his first season in charge.
The club sit comfortably in 10th place this term, eight points above the relegation zone, and Casanova's new contract will tie him to the club until June 2013.
There were also new deals for three of his assistants as well, and a statement on the club's official website read:
"Toulouse would like to announce the contract extensions of Alain Casanova and his entire coaching staff, Thierry Uvernard, Christophe Gardie and Denis Valour, for two more seasons.
"President Olivier Sadran is satisfied with the work of the coach and staff for the last three seasons and wishes to pursue the path of trust and continuity."
Toulouse will lock horns with Montpellier on Saturday in Ligue 1 action.