Luck, who played football at West Virginia and is the father of 2012 No. 1 NFL pick Andrew Luck, has been with the Mountaineers for the last two years.
He was in the third year of his original five-year contract and his new deal will increase his yearly salary to $550,000. Incentive bonuses are included.
"Oliver Luck is a true leader," said West Virginia President Jim Clements. "He has brought stability, momentum and energy to his position. He is someone we want on our team for many more years to come."
In its first year as a member of the Big 12 Conference, West Virginia has put together a 5-0 record under the guidance of Heisman Trophy candidate quarterback Geno Smith.
The Mountaineers, ranked No. 4 in the country, will try to stay unbeaten on Saturday when they meet Texas Tech.
After his collegiate career, Luck appeared in 20 games over four seasons with the Houston Oilers. He had 2,544 passing yards in his career with 13 touchdowns. His final NFL season came in 1986.