The 41-year-old Northern Irishman has proved a perfect fit at Liverpool since taking over from Kenny Dalglish in the summer of 2012 and steered the team to an unexpected title challenge in the Premier League last season.
The Reds came up short, finishing two points behind Manchester City in second place, but secured a return to the Champions League after a four-year absence and earned admiring glances for their vibrant, attacking style of play.
It has prompted Liverpool's American owners, Fenway Sports Group, to give Rodgers a fresh contract.
"We are very fortunate to have a hugely talented individual leading our football performance and in whom we place our trust to deliver the vision we share for Liverpool," principal owner John Henry and chairman Tom Werner said in a Liverpool statement.
"Players and supporters have made it clear how important Brendan is to our success and so to have him commit to us for the long term is a great boost for everyone going forward."
Exact details of the new contract were not disclosed.
Rodgers has impressed in almost every facet of his job, on and away from the pitch.
He is extremely popular with fans for his style of football, his tactical awareness, his insistence on giving youth - and English players - a chance and for breathing new life into a club that has suffered in recent years under the weight of financial and ownership problems.
He also is well-versed in the club's storied history, conducting himself perfectly in all the engagements that have come with the 25th anniversary of the Hillsborough Stadium tragedy in which 96 Liverpool fans died during a crush at an FA Cup semifinal.
The media-friendly Rodgers, meanwhile, has demonstrated that he has a tougher side to him, earning wide praise for the way he handled Luis Suarez last summer when the team's star striker pushed for a move away from Liverpool. Rodgers was also not afraid to quickly jettison Andy Carroll - Liverpool's record signing - because the tall striker did not fit into his plans.
Rodgers seems the ideal person to lead Liverpool as it seeks to regain the English league trophy the club last won in 1989, for the 18th time.
"I am both humbled and privileged to be offered the chance to extend my stay at this great club," Rodgers said. "I am very happy to build on the foundations we have built over the last two years and now we move onto the next phase which I believe will be as exciting, challenging and rewarding."
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