Neil took over at Carrow Road in January, with the team in seventh place in the Sky Bet Championship, and guided them into the top flight following a play-off victory over Middlesbrough at Wembley.
The former Hamilton Accies boss to the club’s website: “I’m delighted to sign a new contract with Norwich City.
“Both parties were taking a chance when I was appointed but it’s worked out very well for all involved, and I’m happy this has been sorted before the season gets underway.
“I’ve really enjoyed my five months at the club, hopefully it is just the beginning as we now look forward to playing in the Barclays Premier League.”
Norwich chief executive David McNally said: “For us this summer it was the most important piece of business to ensure Alex had a much-deserved new contract.
“He galvanised the football club after arriving in January, and we’re certain that Norwich City will continue to progress under his management.
“We’re delighted that the club and Alex will be working together as we continue to prepare for the start of the new Barclays Premier League season.”