Fox joined the Broncos in the 2011 campaign and has led them to the playoffs in each season he has been at the club.
The 59-year-old also guided his side to the Super Bowl in the 2013 campaign where they were hammered 43-8 by the Seattle Seahawks.
He told the club's official website: "I want to thank John Elway and the Broncos organisation for the trust they have shown in me with this agreement.
"I'm proud of what our teams have accomplished, but our expectations are much greater as we pursue the Super Bowl championship that our fans deserve.
"We got closer this past year, but we came up short. So right now all the eggs are in the basket for '14 and doing everything we can to bring that championship back here to Denver."
Fox has an overall record of 37-16 during his three-year tenure with the Broncos.