Morey is starting his fourth season with the NBA club and third leading its basketball operations. He was with the Boston Celtics previously.
"Daryl has displayed great leadership during his three years overseeing our basketball operations," said Rockets owner Leslie Alexander. "In his short time here, Daryl has already established himself as an innovator in the field of talent evaluation and player acquisition. My focus is to bring another world championship to the fans of Houston and I believe Daryl will be instrumental in achieving that goal."
The Rockets have gone 108-56 over the past two seasons. They produced a 53-29 record during the 2008-2009 regular season and made it to the second round of the playoffs for the first time since 1997.
Morey thanked Alexander for supporting him and the team's basketball staff, saying he has provided the resources be competitive on a consistent basis.
"Mr. Alexander has always made it clear that his ultimate goal is a successful return to the NBA Finals and I look forward to continue working with him to meet that challenge," Morey said.