Fox has been with the team since the 2011 season and guided them to the Super Bowl in 2013, where they were defeated by the Seattle Seahawks.
As a result of his new contract, he will be coach at Sports Authority Field until the conclusion of the 2016 campaign.
Broncos executive vice-president John Elway told the club's official website: "We are pleased to reach this agreement with John Fox, who has played a key role in the success and improvement of the Broncos during the last three seasons.
"While our team has made progress each year under coach Fox, we both understand that there is still work to be done for us to reach our ultimate goal.
"Having continuity at the head coaching position is critical in building a championship team, and John Fox is an important part of our foundation as we move forward."
Fox has led Denver to an overall record of 37-16 in the past three seasons, including the playoffs.