Stubbs and fellow coaches John Doolan and Andy Holden have agreed one-year extensions that will take them through until the end of the 2016/17 season.
Stubbs said: “I am very happy to continue with the work in progress. I think supporters would agree that they have seen a lot of positive changes over the past year, and I know there is a lot more to come.
“I think most supporters would agree that whatever disappointments they have suffered in recent seasons are behind us, we are on the right track now, we’re trying to play a winning and exciting brand of football that they want to see and be part of.
“I’m grateful to all of those who have supported the team, especially all of those who have put up their hard-earned money – all of that has helped me get players in – but we need more supporters to come back to their club if we are to continue to get stronger.
“We made decent progress last year, this season we all know we need to get promoted. It’s how we react to the setbacks that will eventually determine how successful we are. If we buckle and fight amongst ourselves we will lose. If we stick together and show our collective commitment, we will win. I’m confident that we can win.”
Chief Executive Leeann Dempster said: “This is a tremendous demonstration of our ambition at this club. We have a really talented management team, and their desire to stick with us shows that they understand we are determined to get this club back to the top.”
Hibernian – relegated out of the Premiership last year – finished runners-up to Hearts in last season’s Championship race, but lost out to Rangers in the play-offs; Stubbs had taken over from Terry Butcher in June 2014.