Assistant manager Jason Tindall has also put pen to paper on a two-year extension on the south coast.
Former Bournemouth player Howe returned to manage the club for a second time in October 2012 and won promotion to the Championship that season.
The 36-year-old, who was previously in charge between 2009 and 2011, took over the club when they were struggling towards the bottom of League One and has since guided them to 11th place in the Championship.
"I'm absolutely delighted to have secured the services of Eddie and Jason for a further two seasons," Bournemouth chief executive Neill Blake told the club's official website.
"(Owner) Maxim (Demin) and I were always keen to show our faith in the pair, and an extension to their existing deals seems like the perfect way to do this.
"Eddie and Jason have quickly become the most successful management team in the club's history and it is imperative that we continue our journey with them at the helm.
"The progress we have made under their stewardship this season and last has been there for all to see and we are excited about what the future holds for AFC Bournemouth under the current ownership and management."