Burnley manager Sean Dyche says striker Danny Ings will not be fazed about facing Liverpool on Wednesday night
The US Soccer Federation announced the move on its official website on Thursday, adding that the German would remain in charge until 2018 and also become its technical director.
Klinsmann - a former Inter Milan and Tottenham striker - took charge of the USA in 2011, having previously coached Germany and Bayern Munich.
He has won the Gold Cup since taking over the States and also guided them to first place in their qualifying group for next year's World Cup.
"One of the reasons we hired Jurgen as our head coach was to advance the programme forward and we've seen the initial stages of that happening on the field and also off the field in various areas," US Soccer president Sunil Gulati said.
"In the past two years he has built a strong foundation from the senior team down to the youth teams and we want to continue to build upon that success."
Klinsmann's side will start their World Cup campaign against Ghana, having been drawn in Group G along with Portugal and Germany, who he took to the semi-finals of the tournament in 2006.
"I am very fortunate to continue the work we started more than two and half years ago," Klinsmann said.
"It's exciting to see the progress we have made, and we continue to make improvements on all fronts.
"The role of technical director is a huge challenge and also a huge opportunity as we look to keep connecting the dots to the youth national teams, coaching education, the development academy and the grassroots efforts in this country."