The Spurs manager's current deal was due to expire next year but included an option for a further two years which the club have now exercised.
"The club is delighted to announce that we have extended the contract of manager Harry Redknapp until 2013," read a statement on the club's official website www.tottenhamhotspur.com.
"Harry guided the side to fourth place in his first full season with the club, our highest league finish since the Premier League's inception, with the prospect of competing in the Champions League for the first time this coming campaign.
"The achievement earned him the Barclay's Premier League Manager of the Season award."
Redknapp took over the Spurs reins in October 2008 with the team bottom of the table having picked up only two points from their opening eight games.
The turnaround under his guidance was capped when Redknapp led the club into the Champions League for the first time in May, their place among Europe's elite secured with a dramatic win over Manchester City in their penultimate game of the season.
Earlier on Tuesday, Redknapp admitted his interest in Sevilla striker Luis Fabiano. The 29-year-old Brazil international, who impressed during the World Cup, is on Tottenham's hit list as Redknapp looks to strengthen his squad.
"Yes, I like him," confirmed Redknapp in an interview with ESPN Soccernet. "He's a fabulous player and would be a brilliant addition to any team.
"It was put to us that he might be available, but we've not made contact with his club Sevilla and, to be perfectly honest, I haven't sat down to discuss any transfer targets with our chairman Daniel Levy, apart from trying to do a deal with Joe Cole."
Source: PA
Source: PA