Bielsa led Leeds to their first promotion to the Premier League in 16 years and will now remain at Elland Road for the 2020-21 season.
Leeds won the league by 10 points and gained their first silverware since 1992.
"Under his tenure, starting with a fine 3-1 victory over Stoke City at Elland Road in August 2018, the former Argentina and Chile head coach has taken charge of a total of 100 games for the Whites, winning 56, drawing 17 and losing 27 over two seasons," the club said in a statement.
Bielsa signed a two-year deal in August 2018 with an option to extend for another season.
The side will face Premier League winners Liverpool in their first game of the 2020-21 Premier League season on Sept. 12.