No monetary figure was announced.
Anderson guided the Tigers to a 31-7 record this season.
"He's done a tremendous job rebuilding our basketball tradition and is poised to lead our program to new heights in the coming years," Director of Athletics Mike Alden said on the University of Missouri's Web site.
The record included the Big 12 Tournament crown this season for the first time in school history and a surprising appearance in the NCAA Tournament's Elite Eight.
Anderson, the first African-American full-time head coach in the history of Missouri athletics, became a hot commodity in college coaching circles after the Tigers succeeded by using the frenetic "40 minutes of hell" style of play made famous by former Arkansas head coach Nolan Richardson.
He has a 65-35 record in three seasons at Missouri.
2014: The Year in Music [PHOTOS]