The Clarets secured automatic promotion with a second-placed finish in the Championship and the club's board have tied down Dyche and his backroom staff on new deals.
He arrived at Turf Moor in October 2012 following an impressive spell at Watford and further enhanced his reputation after Burnley finished above teams with far bigger budgets last season.
Burnley did not reveal the length of the 42-year-old's contract, but were keen to secure his services as they look ahead to an opening fixture against Chelsea at Turf Moor.
A statement from co-chairmen John Banaszkiewicz and Mike Garlick said: "On the subject of key signings we are very pleased to announce that we have agreed new and improved contracts with Sean Dyche and his staff and we thank them all for their hard work.
"This is in addition to the other key 'signings' we have already made in securing the services of some of our current players under new contracts, including, of course, Kieran Trippier and Danny Lafferty."
The Clarets will start amongst the favourites for relegation, but the co-chairmen have urged fans to maintain their vocal support as they attempt to upset the odds again.
They said: "We remain very proud of being associated with a local club - something that means so much to the town and the community we are associated with.
"We have fans around the world like many clubs, but ours are true supporters with roots in Burnley and ties to the region.
"That gives us the base to flourish and grow, attract new fans as we progress through the season.
"Part of the reason we did so well last season was being underestimated by the opposition. In many ways we would like that to continue. We are a small club but we have a lot to shout about and your support home and away can make a difference in games that look tough on paper."