It means the 40-year-old Scot, whose Bluebirds side meet Liverpool at Wembley on Sunday, has committed his future to the club until at least June 2016.
Mackay, whose team are fifth in the Championship, said: "It's with great pride that I have signed a new and long-term contract.
"My positive thoughts of Cardiff, as a city, a club and its supporters have only been enhanced further since coming to south Wales last summer.
"Along with my coaching team, my squad of players and the many hard working people at the club I look forward to the future as we aim to bring success to this club.
"We are sure that all Cardiff supporters and partners will join us in celebrating this news as we push to make history on two fronts this season."
Bluebirds chairman Dato' Chan Tien Ghee said: "We are honoured to see Malky commit himself to our great club for the long term.
"His dedication and hard work has been a joy to see over the last eight months, as has the positive influence it has instilled with everyone associated with Cardiff City.
"The length of contract outlines the strength of bond we all feel and we can look forward with optimism to the years ahead under his stewardship."
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