Gardenhire, 51, has been the Twins' manager for seven seasons, building a 622-512 record. Minnesota was 88-75 last year and lost a one-game playoff with Chicago for the AL Central title.
"Ron and his staff have done an outstanding job over the last seven years, and none was better than the 2008 season," said Twins General Manager Bill Smith.
"Continuity has been a great strength of the Twins organization for two decades. The current staff has played an important role in the design and development of the Target Field facilities and these agreements will carry the staff into the new ballpark in 2010."
The Twins are to move into a new ballpark in 2010. Gardenhire's extension was for two years while his staff was given contracts through the 2010 season.
Gardenhire was the runner-up to Tampa Bay's Joe Maddon in AL manager of the year voting this year. Since taking over the Twins in 2002 he has helped Minnesota to four division titles and six winning records in seven years.