Financial terms were not disclosed. The Twins held an option next season before reaching the new agreement with Gardenhire.
Gardenhire replaced Tom Kelly in 2002 and led the Twins to consecutive American League Central titles, becoming the fourth manager in AL history with back-to-back first-place finishes to start his career.
Gardenhire led the Twins to the AL Championship Series in his first campaign. The Twins were eliminated Sunday in four games by the New York Yankees in the AL Division Series to the New York Yankees.
A member of the Twins' organization since 1987, Gardenhire is 184-138 in two seasons, along with a 5-9 postseason mark.
Kate Middleton recycles dress at movie premiere
Beyonce flaunts bikini body, Blue Ivy in vacation pics