Klopp, who has already led Dortmund to two league titles, took over as head coach in 2008.
Dortmund also reached the Champions League final in May of this year when they were beaten 2-1 by Bayern Munich at Wembley.
Klopp's assistants Zeljko Buvac and Peter Krawietz have also had their deals extended by two years.
If Klopp sees out his contract until June 2018, he will become the seventh longest-serving coach in Bundesliga history.
The 46-year-old told a press conference: "No one needs to call until 2018.
"We feel a lot of extraordinary trust and confidence in this club. This is a clear sign.
"We want to have the tranquility to plan the future of this wonderful club together."