The agreement runs through the 2012 season. Thompson is in his third season leading Green Bay's football operations.
Thompson previously served an eight-year tenure with the Packers personnel department (1992-99) and five seasons in Seattle (2000-04) as the team's vice president of football operations before re-joining the Packers in 2005.
"This is a great organization and I am deeply humbled and appreciative," said Thompson. "This is truly a team effort. Green Bay is a special place and I am honored to work with such a great group of people."
The Packers were 13-3 during the regular season and open their playoff season Saturday at home against Seattle, Thompson's former team.
Thompson played at Southern Methodist in college and also played 10 years for the Houston Oilers.