The 40-year-old Spaniard has been rewarded with a deal that ties him to Goodison Park until the end of the 2018/19 season after guiding the Toffees into fifth place in the Premier League in his first campaign in charge.
Martinez moved from Wigan Athletic last summer - on an initial four-year contract - to replace the Manchester United-bound David Moyes and made an immediate impression on Merseyside as Everton won 21 Premier League games to amass their highest points tally in the competition and clinch a Europa League place.
After signing the deal, he told Everton's official website: “I am delighted to have been given the opportunity to make a further commitment to Everton. I loved my first season at the club.
"I could not be more proud of the way Everton performed throughout the entire season and the memories we were able to make together.
“I am really excited about next season. I knew from the moment I arrived at Everton that this was a special place and I’d like to thank everyone associated with the club, the board, all the staff, the players and our brilliant supporters for believing in me and giving me the opportunity to build on the traditions and success of this great club.”
Chairman Bill Kenwright said: “In many commentators’ eyes, Roberto Martinez is the best young manager in Europe. We agree. He took on an unfamiliar challenge for most managers; to take something really good and make it even better.
“He has succeeded. In his debut season he broke our Premier League record points haul, got us back into Europe and developed some of the most exciting young footballers in the game.
“He conducts himself off the pitch in the same way. He undertakes his business with great style, confidence, positivity and class. He is an Everton man.
“There is no magical ingredient to what we do at Everton. We’re a football club and we recognise the fundamental importance of our manager.
“And, when we find our man, we empower him. We support and provide him with everything at our disposal. We commit to our managers, and we’re immensely pleased that Roberto has committed to us. We want the best because only the best will do.
"I can give you the names of three clubs, but I am not going to, that came knocking but he was never going anywhere.
"He had colossal change thrust on him, and I mean colossal, because David had been there for 11 years. But from day one, he brought a joy and that's all I can say.
"Before Christmas, I thought 'I want this man to stay forever' and I want to get him on a longer contract that shows how much he means to us.
"For 11 years I have sat in this chair and I have, quite rightly, praised David Moyes to the hilt. It's now Roberto Martinez's time and I will praise Roberto Martinez to the hilt."