The Dutchman was appointed in the summer of 2011 and in his first season in charge led Feyenoord to second place in the Eredivisie.
Koeman has continued his good work this season and Feyenoord are currently fifth in the Eredivisie and are only four points behind of leaders FC Twente.
Both parties were therefore happy to strike a deal to extend Koeman's stay with Feyenoord.
Technical director Martin van Geel told Dutch media about the negotiations: "From the start, it was clear we and Ronald had the same thing in mind - a contract extension of one year.
"If you both want that and also think the same about good conditions for both sides, then things can be quick."
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