The Twins lost their last six games and nine of their final 10 in 2013, ending up 66-96. It was the third-worst record in the American League behind the Houston Astros (51-111) and Chicago White Sox (63-99).
But Minnesota announced Monday that Gardenhire was being given a two-year contract to stay on as manager. His entire coaching staff will return in 2014, too.
Gardenhire, 55, has managed the Twins for 12 seasons, the second-longest active tenure for a manager after the Los Angeles Angels' Mike Scioscia. He was hired as manager on Jan. 4, 2002, and took Minnesota to division titles each of his first three seasons.
He is 998-947 over his managerial career with six division pennants and was selected AL Manager of the Year in 2010. His teams were a combined 195-291 the last three seasons.
Gardenhire's 998 games won as manager is second in Twins franchise history to Tom Kelly (1,140), for whom Gardenhire was a coach from 1991 until he was named manager.